SDLTM09915 - SDLT - increased rates for non-resident transactions: Non-resident in relation to a chargeable transaction: Companies, second condition, non-UK control test - para 9 Sch 9A FA03
»Ê¹ÚÌåÓýapp non-UK control test must be read in conjunction with the close company rules set out in Chapter 2 of Part 10 of the Corporation Tax Act 2010.
Meaning of control (section 450 CTA 2010)
A person is treated as having control of a company if they exercise, are able to exercise, or are entitled to acquire, direct or indirect control over the company’s affairs. »Ê¹ÚÌåÓýappre are several ways in which this may be done (see CTM60210 for more details):
- control over the affairs of the company;
- control through voting power;
- control through share capital or through issued share capital;
- control over income of the company; or
- control over assets of the company.
Non-UK control test
For the purposes of the surcharge, a company meets the “non-UK control test� in relation to a chargeable transaction if it meets the basic definition of a close company within the meaning given by Chapter 2, Part 10 CTA 2010, but with the following modifications (paragraph 9(1)):
- section 439 CTA 2010 applies as if references to a “participator� were to “relevant participator�, and references to “five or fewer participators� were to “any number of relevant participators (paragraph 9(2));
- section 444 CTA 2010 applies as if a condition A were omitted (paragraph 9(4)), i.e. for the purposes of the surcharge, a close company includes a company controlled by one or more companies, none of which is a close company, and it cannot be treated as a close company except by taking a non-close company as one of the five or fewer participators requisite for its being so treated;
- section 446 CTA 2010 is omitted (paragraph 9(5)), i.e. for the purposes of the surcharge, a close company includes particular types of quoted companies in which the public holds 35% or more of the voting power; and
- section 451 CTA 2010 (attribution of rights and powers) has effect subject to the limitations set out in paragraph 10 (paragraph 9(6)).
A “relevant participator� means a participator who is non-resident in relation to the chargeable transaction, and is not a general partner in a limited partnership (paragraph 9(3)), although see SDLTM09920 for an exclusion to the latter rule.
When determining whether a participator is non-resident in relation to the chargeable transaction, the appropriate residence test must be used, including any special rules that may apply.