Direct Tax Acts, Finance Act 2018

10 Connected persons
FA96 s131(1) to (8); F(No. 3)A11 s1(2) and Sch1(7); FA14 s97 and Sch3(1)(a)

(1) In this section –

close company” has the meaning assigned to it by Sections 430 and 431;

company” has the same meaning as in Section 4(1);

control” shall be construed in accordance with section 432;

relative” means brother, sister, ancestor or lineal descendant and, for the purposes of the Capital Gains Tax Acts, also means uncle, aunt, niece or nephew;

settlement” includes any disposition, trust, covenant, agreement or arrangement, and any transfer of money or other property or of any right to money or other property;

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 the person has made or entered into the settlement directly or indirectly and, in particular (but without prejudice to the generality of the preceding words), if the person 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.

(2) For the purposes of the Tax Acts and the Capital Gains Tax Acts, except where the context otherwise requires, any question whether a person is connected with another person shall be determined in accordance with subsections (3) to (8) (any provision that one person is connected with another person being taken to mean that they are connected with one another).

(3) [A person shall be connected with an individual if that person is the individual’s husband, wife or civil partner, or is a relative, or the husband, wife or civil partner of a relative, of the individual or of the individual’s husband, wife or civil partner.]1

(4) A person in the capacity as trustee of a settlement shall be connected with –

(a) any individual who in relation to the settlement is a settlor,

(b) any person connected with such an individual, and

(c) a body corporate which is deemed to be connected with that settlement, and a body corporate shall be deemed to be connected with a settlement in any accounting period or, as the case may be, year of assessment if, at any time in that period or year, as the case may be, it is 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.

(5) Except in relation to acquisitions or disposals of partnership assets pursuant to bona fide commercial arrangements, a person shall be connected with any person with whom such person is in partnership, and with the spouse [or civil partner]2 a relative of any individual with whom such person is in partnership.

(6) A company shall be connected with another company –

(a) if the same person has control of both companies, or a person (in this paragraph referred to as “the first-mentioned person”) has control of one company and persons connected with the first-mentioned person, or the first-mentioned person and persons connected with the first-mentioned person, have control of the other company, or

(b) if a group of 2 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 such member is connected.

(7) A company shall be connected with another person if that person has control of the company or if that person and persons connected with that person together have control of the company.

(8) Any 2 or more persons acting together to secure or exercise control of, or to acquire a holding in, a company shall be treated in relation to that company as connected with one another and with any person acting on the direction of any of them to secure or exercise control of, or to acquire a holding in, the company.

Go to Revenue Guidance Notes on TCA

Amendments

1 Substituted by F(No. 3)A11 s1(2) and Sch1(7) and having effect from the passing of Finance (No. 3) Act 2011 – 27 July 2011

2 Inserted by FA14 s97 and Sch3(1)(a) and having effect on and from the passing of FA14 – 23 December 2014

Irish Tax Review Articles

Capital Gains Tax and Trusts. Anne Corrigan, Irish Tax Review, January, 1997

Revenue Precedents

Connected Persons – Is a daughter-in-law or son-in-law connected with her/his father-in-law? Yes. Originally published: 17/01/1996. File ref:IT 96 3504

Sections referred to in text

section 4(1) [Re: Interpretation of Corporation Tax Acts]

section 430 [Meaning of “close company”]

section 431 [Certain companies with quoted shares not to be closed companies]

section 432 [Meaning of associated company and control]

Cross references

5 Interpretation of Capital Gains Tax Acts

81 General rule as to deductions

89 Valuation of trading stock at discontinuance of trade

98A Taxation of reverse premiums

122A Notional loans relating to shares, etc.

118 Benefits in kind: general charging provision

129A Dividends paid out of foreign profits

186 Connected persons

189A Special trusts for permanently incapacitated individuals

193 Income from scholarships

234 Certain income derived from patent royalties

247 Relief to companies on loans applied in acquiring interest in other companies

250 Extension of relief under section 248 to certain individuals in relation to loans applied in acquiring interest in certain companies

268 Meaning of “industrial building or structure

288 Balancing allowances and balancing charges

343 Capital allowances in relation to construction or refurbishment of certain buildings or structures in enterprise areas

372K Non-application of relief in certain cases and provision against double relief

372AJ Non-application of relief in certain cases and provision against double relief

372AZ Restrictions on relief, non-application of relief in certain cases and provision against double relief

372T Non-application of relief in certain cases and provision against double relief

372V Capital allowances in relation to construction or refurbishment of certain park and ride facilities

372W Capital allowances in relation to construction or refurbishment of certain commercial premises

372AAC Capital allowances in relation to conversion or refurbishment of certain commercial premises

372AAD Residential accommodation: capital allowances to lessors in respect of eligible expenditure incurred on the conversion and refurbishment of relevant houses

381A Restriction of loss relief in certain cases

409C Income tax: restriction on use of losses on approved buildings

433 Meaning of “participator”, “associate”, “director” and “loan creditor

436A Certain settlements made by close companies

530G Zero rate subcontractor

531 Payments to subcontractors in certain industries

531R Provision of Parking Space by Employer

552 Acquisition, enhancement and disposal costs

591A Dividends paid in connection with disposals of shares or securities

597A Entrepreneur relief

669A Interpretation

669G Interpretation (Chapter 4)

669I Provisions as to deductions

730BA Personal portfolio life policy

730G Returns and collection of appropriate tax

739K Interpretation

739BA Personal portfolio investment undertaking

766 Tax credit for research and development expenditure

783 Interpretation and general (Chapter 2)

806 Charge to income tax on transfer of assets abroad

808 Power to obtain information

811B Tax treatment of loans from employee benefit schemes

835I Interpretation

882 Particulars to be supplied by new companies

896A Returns in relation to settlements and trustees

906A Information to be furnished by financial institutions

960H Offset between taxes

960S Security for certain taxes

985C PAYE: payment by intermediary

985D PAYE: employee of non-resident employer etc.

985E PAYE: employment not wholly exercised in State

997A Credit in respect of tax deducted from emoluments of certain directors

1094 Tax clearance certificates in relation to certain licences

1095 Tax clearance certificates in relation to public sector contract

Sch 12A Approved Savings-Related Share Option Schemes

Sch 12C Approved Share Option Schemes