Taxation (International and Other Provisions) Act 2010 section 163

Meaning of "connected" in section 159

Section 163 defines what it means for two persons to be "connected" for the purposes of the transfer pricing rules on indirect participation.

• Two persons are connected if one is an individual and the other is that individual's spouse, civil partner, or a relative (brother, sister, ancestor or lineal descendant) of the individual or their spouse or civil partner, or the spouse or civil partner of any such relative.
• Two persons are also connected if one is a trustee of a settlement and the other is the settlor of that settlement, or someone connected with that settlor.
• "Relative" is defined narrowly to mean a brother, sister, ancestor or lineal descendant — it does not extend to more distant family such as uncles, aunts or cousins.
• The definitions of "settlement" and "settlor" follow the meanings used in the income tax legislation (section 620 of the Income Tax (Trading and Other Income) Act 2005).