Jurisdiction(s):
United Kingdom

Key definition

Connected persons definition

What does Connected persons mean? Connected persons describes those whose relationship with a company director means the director could influence or benefit from a transaction, so dealings with them are treated as dealings with the director. In the UK, the term is defined in the Companies Act 2006, sections 252–255 (applying across England & Wales, Scotland and Northern Ireland). It includes members of the director’s family, a body corporate with which the director is connected (for example through control), a person acting as trustee of a trust whose beneficiaries include the director or persons connected with the director, and a person acting as...

UK capital allowances: connected persons definitions, transfer rules and anti-avoidance for plant and machinery, integral features, and structures and buildings

Published by a LexisNexis Tax expert

Practice notes

Safeguards are in place to prevent, in broad terms, the movement of assets between connected parties in a manner that speeds up capital allowances via the annual Investment allowance or first-year allowances, or that deliberately contrives to overstate the figure on which relief is available by any artificial means whatsoever.

This Practice Note explains how the capital allowances regime defines Connected persons and also sets out how those provisions operate when assets pass between such persons.

For further guidance and detail on an election permitting alternative treatment where a trade is transferred between connected persons, see Practice Note: Capital allowances and company reconstructions—Transfer of a trade between connected persons in practice.

For an overview of the computation of capital allowances for plant and machinery, including, in particular, the meanings of annual investment allowance, first-year allowances, disposal value and writing down allowance, refer to Practice Notes: How plant and machinery allowances are claimed—income tax and How plant and machinery allowances are claimed—corporation tax.

For a discussion of how allowances for structures and buildings are determined, see Practice Note: Structures and buildings allowances...

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Steven Bone

Gateley Legal

Steven is a tax-qualified chartered surveyor. He has specialised in capital allowances for more than 25 years, and more recently land remediation relief and R&D tax incentives. In his role as director at Gateley Capitus, Steven works with businesses that are buying, building or refurbishing commercial property, cleaning-up contaminated land and buildings or undertaking R&D activity to help them pay the right amount of tax by optimising the tax reliefs available to them.Prior to joining Gateley Capitus, Steven held senior roles in the Big 4, specialist boutique and national mid-tier accountancy firms. He is a fellow of the Royal Institution of Chartered Surveyors (RICS) and the Association of Taxation Technicians.Alongside daily practice, Steven is a tax incentives writer and speaker for property investment and innovation activity. ...

Web page updated on 21/05/2026

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