Jurisdiction(s):
United Kingdom

Related legal acts

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...

Connected persons for UK corporation tax (CTA 2010 ss 1122–1123): control tests for companies, individuals, trustees and partnerships; implications for SDLT, LTT, LBTT, stamp duty and SDRT.

Published by a LexisNexis Tax expert

Practice notes

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This Practice Note explores the meaning of connected persons as employed within sections 1122 and 1123 of the Corporation Tax Act 2010 (CTA 2010). An almost identical definition for income tax purposes is found in section 993 of the Income Tax Act 2007 (ITA 2007).

CTA 2010, ss 1122 and 1123 specify:

when a company is connected with another company
when a company is connected with another person
when an individual is connected with another individual
with whom a trustee of a settlement is connected, and
with whom a partner in a partnership is connected

Why is the definition of connected persons important?

The expression ‘connected persons’ is used across a range of corporation tax and other tax provisions, including:

throughout the Corporation Tax Acts (although a modified definition applies for specific parts)
for stamp duty land tax (SDLT), land transaction tax (LTT) and land and buildings transaction tax (LBTT) purposes
and in relation to the market value rules applicable for stamp duty and stamp duty reserve tax (SDRT) purposes

It is most commonly relied upon to ensure that transactions between connected persons are assessed to tax by reference to the market value of the...

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Web page updated on 21/05/2026

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