Section 51G — Finance Act 2008: Companies and groups: meaning of “related”

Companies and groups: meaning of “related” 51G 1 A company (“C1”) is related to another company (“C2”) in a financial year if one or both of—

a the shared premises condition, and b the similar activities condition, are met in relation to the companies in that financial year.

2 Where C1 is related to C2 in a financial year, C1 is also related to any other company to which C2 is related in that financial year.

3 A group of companies (“G1”) is related to another group of companies (“G2”) in a financial year if in that financial year a company which is a member of G1 is related to a company which is a member of G2.

4 Where G1 is related to G2 in a financial year, G1 is also related to any other group of companies to which G2 is related in that financial year.

5 The shared premises condition is met in relation to two companies in a financial year if, at the end of the relevant chargeable period of one or both of the companies, the companies carry on qualifying activities from the same premises.

6 The similar activities condition is met in relation to two companies in a financial year if—

a more than 50% of the turnover of one company for the relevant chargeable period is derived from qualifying activities within a particular NACE classification, and b more than 50% of the turnover of the other company for the relevant chargeable period is derived from qualifying activities within that NACE classification.

7 In this section— “ NACE classification ” means the first level of the common statistical classification of economic activities in the European Union established by Regulation (EC) No 1893/2006 of the European Parliament and the Council of 20 December 2006 (as that Regulation has effect from time to time), and “ relevant chargeable period ”, in relation to a company and a financial year, means the chargeable period of the company ending in that financial year.