Section 348 | Introduction: meaning of “connected companies relationship”

(1)This Chapter contains some general rules relating to connected companies relationships.

(2)For the purposes of this Part a debtor relationship of a company is a connected companies relationship if there is a connection between—

(a)the company, and

(b)another company standing in the position of a creditor as respects the debt in question.

(3)For the purposes of subsection (2) a company is treated as standing in the position of a creditor if it indirectly stands in that position by reference to a series of loan relationships or relevant money debts.

(4)For the purposes of this Part a creditor relationship of a company is a connected companies relationship if there is a connection between—

(a)the company, and

(b)another company standing in the position of a debtor as respects the debt in question.

(5)For the purposes of subsection (4) a company is treated as standing in the position of a debtor if it indirectly stands in that position by reference to a series of loan relationships or relevant money debts.

(6)For the purposes of this Part, if a loan relationship is a connected companies relationship at any time in an accounting period, it is treated as being such a relationship for the period.

(7)In this section “relevant money debt” means a money debt which would be a loan relationship if a company directly stood in the position of creditor or debtor.

(8)Section 466 (companies connected for an accounting period) applies for the purposes of this section.