Income Tax (Earnings and Pensions) Act 2003 Schedule 5 paragraph 23

Excluded activities: provision of facilities for another business

Schedule 5 paragraph 23 deals with circumstances where a company providing services or facilities to another business may find that activity treated as an "excluded activity" for Enterprise Management Incentive (EMI) purposes, because the business it serves is itself substantially engaged in excluded activities and both businesses are under common control.

• Where a company (the "service provider") provides services or facilities to another business, this is an excluded activity if that other business substantially carries on excluded activities (such as dealing in land, financial trading, leasing, or property development) and the same person holds a controlling interest in both businesses
• A person has a controlling interest in a company if they control it, or if the company is a close company and they (or an associate) are a director owning or controlling more than 30% of the ordinary share capital, or if at least half of the business can be regarded as belonging to them
• For unincorporated businesses, a controlling interest exists where a person is entitled to at least half of the assets used in the business or at least half of the income arising from it
• The rights and powers of a person's associates are attributed to that person when assessing control, with "associate" following the close company definition but excluding brothers and sisters from the meaning of "relative"