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

Section 554AA: meaning of "material interest"

Section 554AE defines what "material interest" means for the purposes of the disguised remuneration rules in section 554AA, which deal with close companies and arrangements made through third parties.

• The definition of "material interest" follows the same meaning used in the benefits code under section 68, but with specific modifications when applied in the context of section 554AA.
• The concept of "associate" is expanded so that any person carrying on business as a promoter of the relevant arrangement (within the meaning of Part 5 of Finance Act 2014) is treated as an associate, and if that promoter is a company, any associated company of the promoter is also treated as an associate.
• The definition of "participator" is widened to align with the close company loan-to-participator charge rules in section 455 of CTA 2010, and extends to cover persons who would be participators if a non-UK resident company were treated as a close company.
• The term "associated company" takes its meaning from section 449 of CTA 2010, which is the standard definition used in the close companies legislation.