BLM81065 | Sale of lessor companies and similar arrangements: partnerships: partnerships involving consortia: changes in the ownership of the partner company - meaning of 'associated company'

Section 430 CTA 2010

When the partner company is a consortium company and there is a change of ownership of the consortium company the meaning of associated company extends to cover companies associated with the relevant consortium member.

Example: associated companies - consortia - change in ownership of partner:

View diagram for this example

In this example the partner’s interests in the partnership business remain constant. Instead C Ltd, a member of the consortium, sells part of its interest in the partner company, A Ltd, to F Ltd. A Ltd is a partner in the leasing business and a consortium company. The change is in the ownership of the consortium company.

Paragraph 26 (4) deals with situations where there is a change in the ownership of the consortium company but no qualifying change in the consortium company’s interest in the partnership business.

Attention focuses on the ‘relevant member of the consortium’.

The ‘relevant member of the consortium’ is a company that is:

• a member of the consortium at the start of the day; when

• there is a qualifying change in ownership during the day; and

• the company would be ‘company E’ in relation to the consortium company. These terms are defined in paragraph 12 see BLM80320 above

insert ‘attachment at BLM80165B’ here

In this example C Ltd is the relevant member of the consortium because it is:

• a member of the consortium and

• it is ‘company E’ in relation to the consortium company and

• there is a qualifying change in ownership at this tier.

The associated companies are therefore C Ltd and the companies associated with C Ltd. These companies are shaded grey in the diagram.