CTM03790 - Corporation Tax: small companies:
control by a loan creditor
A loan creditor can have control of a company under ICTA88/S416
(2)(c) (for the meaning of 'control' see
CTM60230), but ESCC9 may prevent two
companies from being regarded as associated where:
- there is common control of two companies
by a single loan creditor, or
- a loan creditor company has control of
another company.
The concession will apply where control or common control arises
only by virtue of Section 416 (2)(c) and, the loan creditor is
either:
- not a close company, or
- a bona-fide commercial loan creditor
(whether a company or not) and there are no past or present
connections between the companies, apart from the loans which
produce control.
