Income Tax (Earnings and Pensions) Act 2003 section 554AB

Meaning of "relevant transaction"

Section 554AB defines what counts as a "relevant transaction" by the close company (B) for the purposes of the close companies' gateway in section 554AA, covering various types of payments, transfers, loans, security arrangements and long leases made to a relevant third person.

• A relevant transaction occurs when B carries out one of seven specified types of transaction involving a relevant third person, and the transaction is not an excluded transaction under section 554AC
• The specified transactions include paying money, transferring assets, acquiring connected rights, writing off loans, enabling a third party to acquire securities, providing security for loans or liabilities, and granting long leases of over 21 years
• "Loan" is broadly defined to include any form of credit and purported loans, while "making available" covers any method however informal, regardless of whether the asset or money is actually used or the third person has any legal right to use it
• For leases, the effective duration is assessed by assuming likely extensions will occur, and where a later lease of the same premises is likely, the original lease is treated as continuing until the end of that later lease