Section 18I | Association through a loan creditor ^F1

(1)A company (“A”) is not under the control of another company (“B”) for the purposes of section 18E(4) if—

(a)B is a loan creditor of A,

(b)there is no other connection between A and B, and

(c)either—

(i)B is not a close company, or

(ii)B's relationship to A as a loan creditor arose in the ordinary course of a business which B carries on.

(2)Subsection (3) applies if—

(a)two companies (“A” and “B”) are controlled by the same person who is a loan creditor of each of them,

(b)there is no other connection between A and B, and

(c)either—

(i)the loan creditor is a company which is not a close company, or

(ii)the loan creditor's relationship to each of A and B as a loan creditor arose in the ordinary course of a business which the loan creditor carries on.

(3)In determining for the purposes of this Part whether A and B are associated with each other, rights which the loan creditor has as a loan creditor of A, or as a loan creditor of B, are ignored.

(4)In subsection (2)(a) “control” has the same meaning as in section 18E(4).

(5)In this section—

(a)“connection” includes a connection in the past as well as a connection in the present, and

(b)references to a connection between two companies include any dealings between them.

(6)In this section references to a loan creditor of a company are to be read in accordance with section 453.