PSI21.2.2 - Centralised Schemes: Associated
Employers - Associated Employers
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(This archived guidance relates to HMRC discretionary
practice before the 6th April 2006. For current guidance on
Registered Pension Schemes see the Registered Pension Schemes
Manual)
Associated employers are defined in section 590A(3) and (4)
ICTA 1988. They are associated if directly or indirectly one is
controlled by the other or both are controlled by a third person.
Control is construed in 2 ways depending on whether the company is
a close company as defined in section 414 ICTA 1988 or another
corporate body.
- For a close company the definition of
control is given in section 416 ICTA 88. A person is considered to
have control of such a company if he or she exercises or is able to
exercise or is entitled to acquire direct or indirect control over
the company’s affairs. In particular and without prejudice to
the above the person has control if he or she owns or is entitled
to acquire:
- the greater part of the share capital or issued
share capital of the company or of the voting power in the company;
or
- such part of the issued share capital of the
company as would, if the whole of the income of the company were in
fact distributed among the participators (without regard to any
rights which he/she or any other person has as a loan creditor)
entitled him/her to receive the greater part of the amount so
distributed; or
- such rights as would, in the event of the
winding-up of the company or in any other circumstances, entitle
him/her to receive the greater part of the assets of the company
which would then be available for distribution among the
participators.
- For other corporate bodies the definition
of control is given in section 840 ICTA 1988 as the power of a
person to secure:
- by means of the holding of shares or the
possession of voting power in relation to that or any other body
corporate; or
- by virtue of any powers conferred by the
articles of association or other document regulating that or any
other body corporate, that the affairs of the first mentioned body
corporate are conducted in accordance with the wishes of that
person, and, in relation to a partnership, means the right to a
share of more than one half of the assets, or of more than one half
of the income, of the partnership.
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