Company name:...............................................................
Period end:.........................................
For accounting periods ending no later than 31 March 2011
Prepared by:...............  Date............
Reviewed by:..............  Date...........

Associated Companies Checklist Notes

For accounting periods ending on or after 1 April 2011 see Associated companies checklist (new)


Is the company a Close Investment Holding Company?
If "Yes", then the company is taxed at the main rate of Corporation Tax.

The control tests:  

Who controls the company is terms of:

  • Voting power
  • Number of ordinary shares
  • Right to income (excluding loan creditors)
  • Right to capital on winding up

Look at future entitlements as well current entitlement


Does a loan creditor control the company?

ESC C9: a loan creditor is not treated as controlling the company if:

  • There is no past or present connection between them and
  • The loan company is not a close company, or
  • It is a bona fide loan creditor

If more than one person can control the company (using any of the tests above):

  • Work out the minimum controlling combination (known as the "irreducible group") of individuals required to excercise control.
Can anyone else control the company by any other means (e.g. by any other right to income or right to assets, or votes, or as a nominee).  


Work out which individuals are associated with each other.

An individual's associates are:

  • Spouse or civil partner
  • Blood relatives*
  • Business partners**
  • The beneficiary of a trust will be an associate of the trustees.
  • The settlor of a trust will be an associate of beneficiaries and trustees.

* if there is no commercial interdependence between companies, associated blood relatives will only include minor children per ESC C9 

**Companies controlled by business partners are not associated providing that there are no relevant tax planning arrangements.


Step 2:

  • For each individual, attribute the rights of each of their associates for each of the control tests above. 
  • Do not attribute the rights of associates' associates.
  • Consider the affect of ESC C9 when attributing rights of relatives and partners.

Step 3:

  • Identify which companies are controlled by the same individual or irreducible group of individuals.

Step 4:

  • Exclude any companies which are dormant.
  • Include foreign companies.
  • Exclude companies controlled by business partners, or blood relatives (excluding minor children) if there is no commercial interdependence between their companies and yours: per ESC C9. Do not exclude if there are tax planning arrangements in place.



Step 5:

  • Work out which controlling combination controls the greatest number of companies.

Step 6:

  • Enter number of associated companies on each company's tax return

New rules
For associated companies:

For accounting periods ending on or after 1 April 2011 see Associated companies checklist (new)

Need help?
Detailed guidance and examples are provided in these Practical Tax Guides:

Contact the Virtual Tax Partner Support service


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