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CTM03943 | Small profits rate: financial year 2023 onwards: associated company definition: association through a loan creditor

From HM Revenue & Customs · Company Taxation Manual

A loan creditor may have control of a company under CTA10/S450 (3)(d). However, CTA10/S18I may apply to disregard the rights of loan creditors in determining whether companies are associated where:

  • there is common control of two companies by a single loan creditor, or

  • a loan creditor company has control of another company.

This will be so where control or common control arises only under CTA10/S450 (3)(d) and the loan creditor is either:

  • not a close company, or

  • the loan relationships arose in the ordinary course of business and there are no past or present connections between the companies, apart from the loans which would otherwise establish control.

For the meaning of 'control' see CTM60230.