CTM03944 - Small profits rate: financial year 2023 onwards: associated company definition: association through a trustee

CTA10/S18J

Where the majority of the shares in a company are held in trust then, under CTA10/S450 (3)(a) and (b), the trustee will have control of that company. The trustee may be a professional person - for example, a solicitor or trustee company of a clearing bank, yet all the companies under the control of the trustee would be associated even if there were no commercial association.

CTA10/S18J applies in such circumstances to disregard the rights and powers held in trust where there is no other connection between the companies whose shares are held, whether past or present. Connection for this purpose includes dealings of any kind.

There is a power in CTA10/S18K to enable an officer who believes the issuing company is a close company to issue information notices requiring:

• the registered holder of shares and securities to disclose a trust relationship and name the beneficial owners
• particulars of bearer securities issued, including amounts and names and addresses of the recipients.

Securities for this purpose includes shares, stocks, bonds, debentures, debenture stock and any promissory note or instrument evidencing indebtedness to a loan creditor of the company.

For the meaning of ‘control’ see CTM60220.