Corporation Tax Act, 1976

Connected persons.

157.—(1) For the purposes of, and subject to, the provisions of the Corporation Tax Acts which apply this section, any question whether a person is connected with another shall be determined in accordance with the following provisions of this section (any provision that one person is connected with another being taken to mean that they are connected with one another).

(2) A person is connected with an individual if that person is the individual's husband or wife, or is a relative, or the husband or wife of a relative, of the individual or of the individual's husband or wife.

(3) A person, in his capacity as trustee of a settlement, is connected with any individual who in relation to the settlement is a settlor, with any person who is connected with such an individual and with a company which, in accordance with subsection (10), is deemed to be connected with that settlement (“settlement” and “settlor” having for the purposes of this subsection the meanings assigned to them by subsection (9)).

(4) Except in relation to acquisitions or disposals of partnership assets pursuant to bona fide commercial arrangements, a person is connected with any person with whom he is in partnership, and with the husband or wife or a relative of any individual with whom he is in partnership.

(5) A company is connected with another company—

(a) if the same person has control of both, or a person has control of one and persons connected with him, or he and persons connected with him, have control of the other, or

(b) if a group of two or more persons has control of each company, and the groups either consist of the same persons or could be regarded as consisting of the same persons by treating (in one or more cases) a member of either group as replaced by a person with whom he is connected.

(6) A company is connected with another person if that person has control of it or if that person and persons connected with him together have control of it.

(7) Any two or more persons acting together to secure or exercise control of a company shall be treated in relation to that company as connected with one another and with any person acting on the directions of any of them to secure or exercise control of the company.

(8) In this section—

“control” shall be construed in accordance with section 102 (meaning of “associated company” and “control”),

“relative” means brother, sister, ancestor or lineal descendant.

(9) In this section, “settlement” includes any disposition, trust, covenant, agreement or arrangement, and “settlor”, in relation to a settlement, means any person by whom the settlement was made; and a person shall be deemed for the purposes of this section to have made a settlement if he has made or entered into the settlement directly or indirectly and in particular (but without prejudice to the generality of the preceding words) if he has provided or undertaken to provide funds directly or indirectly for the purpose of the settlement, or has made with any other person a reciprocal arrangement for that other person to make or enter into the settlement.

(10) For the purposes of this section, a company shall be deemed to be connected with a settlement in any accounting period if it is at any time in the period a close company (or only not a close company because it is not resident in the State) and the participators then include the trustees of or a beneficiary under the settlement.