CTM03760 - Corporation Tax: small companies: ESCC9

ESCC9 (for the full text - see CTM03765) applies for the purposes of small companies relief and starting rate relief.

Broadly, the concession relaxes the rules of association in respect of common control where:

• the companies are controlled by a common commercial loan creditor (see CTM03790),
• the companies are controlled by a common shareholder by virtue of fixed rate preference shares (see CTM03810),
• the companies are controlled by a common trustee, such as a trustee company of a clearing bank (see CTM03830).

In addition, the concession applies so that, where there is no substantial commercial interdependence between the companies, the attribution of a relative's rights is limited to those of husbands, wives and minor children. The term ‘substantial commercial interdependence’ is explained at CTM03770.

Example

Mrs C is Mr A's sister, but neither Mr B nor Mr C is an associate of Mr A.

Mr A controls Company AM and he can be taken to control Company A1M if the rights and powers of his sister, Mrs C, are attributed to him. However, if there is no substantial commercial interdependence between Company AM and Company A1M, you should not regard Mr A as having control of the latter company and you should not, therefore, regard the two companies as associated.

Accounting periods beginning before 20 June 1994

For accounting periods beginning before 20 June 1994 an earlier version of the concession applies. If you require a copy of the concession, or guidance on its application, contact CT&VAT (Technical).