CFM39170 - Loan relationships: tax avoidance: index-linked gilt-edged securities: the relevant group
The 鈥榬elevant group鈥�
As it is possible for two companies within the same group to undertake a relevant hedging scheme together (for example, company A holds the index-linked gilts and company B enters into a matching total return swap), CTA09/S400A applies to schemes that operate on a group basis as well as solo company schemes.
The 鈥榬elevant group鈥� for the purposes of CTA09/S400A, is defined as company A and any other company which is both 鈥榓ssociated with鈥� company A at any time in the accounting period and party to the same relevant hedging scheme.
鈥楢ssociated with鈥�
CTA09/S400C sets out that a company is 鈥榓ssociated with鈥� another company if any of the following 5 conditions are met:
Condition 1 - the 鈥榗onsolidation condition鈥�
Company A and company B are associated with each other if the financial results of both companies are required to be consolidated into accounts prepared under section 399 of the Companies Act 2006 or, if they are not to be consolidated into such accounts, then this is due to the exemption at section 399(3).
Condition 2 - connected companies
Company A and company B are associated with each other if they are connected with each other as defined at CTA09/S466 (see CFM35110).
Condition 3 - major interest
Company A and company B are associated with each other if one of those companies has a 鈥榤ajor interest鈥� in the other company. The meaning of 鈥榤ajor interest鈥� is the same as that used for loan relationship purposes (see CFM35920).
Condition 4 - the 鈥榗onsolidation condition鈥� and a 鈥榤ajor interest鈥�
Company A and company B are associated with each other if company A and a third company meet the 鈥榗onsolidation condition鈥� (see condition 1 above) and that third company has a 鈥榤ajor interest鈥� (see condition 3 above) in company B.
Condition 5 - a 鈥榤ajor interest鈥� and connection
Company A and company B are associated with each other if company A and a third company are 鈥榗onnected鈥� (see condition 2 above) and that third company has a 鈥榤ajor interest鈥� in company B (see condition 3 above).