Taxation of Chargeable Gains Act 1992 section Sch A1 para 24

Joint enterprise companies: relevant connection

Schedule A1 paragraph 24 defines when a "relevant connection" exists between a joint enterprise company and the parties involved, which is important for determining whether certain gains qualify for special treatment.

• A relevant connection exists between a joint enterprise company and a venture partner if the partner (alone or with connected persons) holds or is beneficially entitled to at least 40% of the company's share capital, voting rights, assets on winding up, or income distributions.
• If two or more venture partners are connected with each other, a relevant connection also exists between the joint enterprise company and each of those connected partners if their combined holdings meet the 40% threshold.
• A person is treated as holding anything held by someone connected with them for the purposes of these tests.
• Whether a relevant connection exists is assessed at the time of the disposal giving rise to the chargeable gain in question.