Corporation Tax Act 2009 section 900H

Supplementary provision about when two persons are related

Section 900H expands the meaning of "related party" in the loan relationship rules to include situations where the transfer pricing participation condition is met between two persons, and extends this to firms (partnerships) where relevant.

• Two persons are treated as related parties if the participation condition from the transfer pricing rules is met between them, broadening the standard related party definition.
• The participation condition is determined by applying the test in section 148 of TIOPA 2010, which looks at whether one party has sufficient influence or control over the other.
• The extended related party definition also applies to firms (partnerships) where, for profit allocation purposes, references to a company are read as references to the firm.
• This provision ensures that loan relationships between parties connected through participation or control are subject to the same restrictions as those between other types of related parties.