Section 463 | Whether a person is generally a “related party” of another

(1)For the purposes of this Part a person (“A”) is a “related party” of another person (“B”)—

(a)throughout any period for which A and B are consolidated for accounting purposes,

(b)on any day on which the participation condition is met in relation to them, or

(c)on any day on which the 25% investment condition is met in relation to them.

(2)A and B are consolidated for accounting purposes for a period if—

(a)their financial results for a period are required to be comprised in group accounts,

(b)their financial results for the period would be required to be comprised in group accounts but for the application of an exemption, or

(c)their financial results for a period are in fact comprised in group accounts.

(3)In subsection (2) “group accounts” means accounts prepared under—

(a)section 399 of the Companies Act 2006, or

(b)any corresponding provision of the law of a territory outside the United Kingdom.

(4)The participation condition is met in relation to A and B (“the relevant parties”) on a day if, within the period of 6 months beginning or ending with that day—

(a)one of the relevant parties directly or indirectly participates in the management, control or capital of the other, or

(b)the same person or persons directly or indirectly participate in the management, control or capital of each of the relevant parties.

(5)For the interpretation of subsection (4), see sections 157(1), 158(4), 159(1) and 160(1) (which have the effect that references in that subsection to direct or indirect participation are to be read in accordance with provisions of Chapter 2 of Part 4).

(6)If one of the relevant parties is a securitisation company within the meaning of Chapter 4 of Part 13 of CTA 2010, the relevant parties are not to be regarded as related parties of each other as a result of subsection (4) merely by reference to the fact that—

(a)the securitisation company is held by a trustee of a settlement, and

(b)the other relevant party is a settlor in relation to that settlement.

(7)The 25% investment condition is met in relation to A and B if—

(a)one of them has a 25% investment in the other, or

(b)a third person has a 25% investment in each of them.

(8)Sections 464 and 465 apply for the purpose of determining whether a person has a “25% investment” in another person.