Glossary · UK
What is Connected Persons (HMRC)?
HMRC definition of parties treated as connected for anti-avoidance rules, including spouses, relatives, and controlled companies.
Full Definition
HMRC uses the concept of 'connected persons' (defined in section 1122 of the Corporation Tax Act 2010 and section 286 of the Taxation of Chargeable Gains Act 1992) to prevent artificial transactions between related parties being used to avoid tax. Connected persons include: a spouse or civil partner; brothers, sisters, ancestors and lineal descendants; the spouses or civil partners of relatives; and companies under common control. Where a disposal is made to a connected person, it is deemed to take place at market value regardless of the actual consideration paid. This prevents, for example, selling an asset at a loss to a family member to create an artificial CGT loss.