AIA and Common Control, CAA 2001 section 51F

AIA and Common Control, CAA 2001 section 51F

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Two companies are owned by similar shareholders, but not quite the same. No individual shareholder controls both companies but two shareholders together would in each company. Hence they are associated companies for such as the smaller companies tax rate.

Under Capital Allowances Act 2001 s.51F it states; 

"A company is controlled by a person in a financial year if it is controlled by that person at the end of its chargeable period ending in that financial year."

My question is; does person also mean persons? Are my two companies caught by the fourth restriction from both having maximum AIA?

Any help much appreciated.

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By martinscutt
08th Jul 2014 17:11

For AIA

I believe it is control by the same person not persons ALSO the companies must also be related, companies are related if operating from the same premises or having over 50% turnover derived from the same activities. 

 

 

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By Steve Kesby
08th Jul 2014 18:00

Person...

... can include persons, by virtue of s. 6(c) of the Interpretation Act 1978, which says that "words in the singular include the plural and words in the plural include the singular".

However, in the context of CTA 2009, s. 472 (control for loan relationships purposes), which is similarly constructed to CAA 2001, s. 51F, HMRC say at CFM35120, that person only includes persons if together they can secure that the affairs of the company are conducted in accordance with their wishes.

Sadly that doesn't sit very well with ITA 2007, s. 995 (also similarly constructed), taken in the context of s. 993(6), which acknowledges that "person" in s. 995 can indeed include "persons", where the other persons involved are connected with the first person.

Provided there's no connection between the shareholders though, you can probably "hang your hat" on CFM35120, as applying to CAA 2001, s. 51F as it applies to CTA 2009, s. 472, as Martin suggests.

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