BLM81060 | Sale of lessor companies and similar arrangements: partnerships: partnerships involving consortia: changes in the partner company's interest in the business - meaning of 'associated company of the relevant company'

Section 430 CTA2010

Special rules apply when the partner company is a consortium company and there is a change in the partner company’s interest in the business of the partnership.

Example 1: associated companies - change in interest in business

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This structure includes a consortium company. Partner A Ltd is a consortium company so if A Ltd reduces its interest in the partnership business then the associated companies are any members of the consortium at the start of that day and any company associated with that member of the consortium on that day.

Example 2

Partner company A Ltd reduces its interest in the partnership business. The associated companies are shaded grey in this diagram:

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• A Ltd is the partner company

• C Ltd and F Ltd are members of the consortium

• D Ltd, E Ltd and G Ltd are associated companies of the members of the consortium.

Example 3: associated companies - change in interest in business:

Partner company B Ltd reduces its interest in the partnership. Attention focuses on B Ltd and only companies associated with B Ltd would be associated companies. The associated companies are shown shaded in grey in this diagram:

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• B Ltd is the partner company

• H Ltd and I Ltd are associated companies of B Ltd.