Annex 1: Minor changes in the law Change 3: Small profits rate and marginal relief: relaxations in the test for being an associated company: sections 25 and 28 to 30 and Schedule 1(section 99 of CAA) Paragraph 5: Relatives
Section 417(3) and (4) of ICTA (see now section 448 of this Act) defines “associate” to include a relative. By concession, in some circumstances, HMRC restrict the definition of “relative” to a husband, wife or minor child. This part of the concession depends on there being “no substantial interdependence” between the companies concerned. This test forms part of the review of the associated companies rules, announced by the Chancellor in his Autumn 2007 Statement on Tax Simplification Reviews. For the moment this Change does not legislate paragraph 5 of the concession.