Section 18I — Corporation Tax Act 2010: Association through a loan creditor

Association through a loan creditor 18I 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.