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CTA09/S407

S407 and S408 were repealed by FA15. »Ê¹ÚÌåÓýappy no longer apply to loans entered into on or after 3 December 2014. For loans entered into before this date this treatment continues until 31 December 2015 (or until the debt is modified). For more details, please see CFM37330.

DDS: Meaning of connection

For the purposes of CTA09/S407, connection between companies is determined in accordance with CTA09/S408, which states that there is a connection between two companies at any time in the accounting period where

• one of the companies has control of, or a major interest in, the other, or
• both the companies are under the control of the same person.

This is the CTA09/S466 definition of connection, expanded to include a major interest as well as a control test.

Control

Control has the same definition as CTA09/S472 - essentially owning most of the shares in a company, or being able to direct how the company operates. It excludes shares held on trading account.

Companies are not connected where they are under the common control of the Crown.

»Ê¹ÚÌåÓýappre are more details at CFM35120.

Major interest

Major interest is defined in CTA09/S473. A company has a major interest in another company where

• it and another person taken together control the other company, and
• each have at least a 40% interest in the company (excluding shares held on trading account).

»Ê¹ÚÌåÓýappre are more details at CFM35920.

Exemptions

Where the creditor satisfies the conditions of CTA09/S469, which essentially excludes companies dealing in debt, there is deemed to be no connection to the issuer of the security. »Ê¹ÚÌåÓýappre is more detail at CFM35130.