Section 429 | Meaning of “non-consolidated associate”

(1)An entity is a “non-consolidated associate” of a worldwide group, in relation to a period of account of the group (“the relevant period of account”) if condition A, B , C or D is met.

(2)Condition A is that the ultimate parent’s interest in the entity is accounted for in the financial statements of the group for the relevant period of account—

(a)as a joint venture or an associate, and

(b)using the gross equity method or the equity method.

(3)Condition B is that—

(a)the entity is a partnership, and

(b)an interest allowance (consolidated partnership) election has effect in relation to the relevant period of account.

(4)Condition C is the entity is a non-consolidated subsidiary of the ultimate parent at any time during the relevant period of account.

(4A)Condition D is that—

(a)the entity is—

(i)a partnership, or

(ii)a transparent entity (other than a partnership), and

(b)the ultimate parent’s interest in the entity is accounted for in the financial statements of the group for the relevant period of account on the basis of fair value accounting.

(5)In this section the following expressions have the meaning they have for accounting purposes—

“associate”;

“equity method”;

“gross equity method”;

“joint venture”.

(6)For the purposes of this section—

(a)“entity” includes anything which may be treated as an entity for accounting purposes (regardless of whether it has a legal personality as a body corporate);

(b)an entity is “transparent” if—

(i)it is not chargeable to corporation tax or income tax as a person (ignoring any exemptions), or

(ii)it is a collective investment vehicle which is “transparent for income tax purposes” for the purposes of paragraph 8 of Schedule 5AAA to TCGA 1992 (see paragraph 8(7) of that Schedule).

(7)This section has effect for the purposes of this Part.