In a transaction or deal this refers to a situation where the buyers, sellers or investors have an existing business or personal relationship. Examples of connected people are:
• a spouse or civil partner,
• a direct relative (ancestors, brothers, sisters, or lineal descendants),
• the spouse or civil partner of a direct relative,
• a trustee of a settlement where the settlor is a member, or someone connected with a member,
• a person (or that person’s spouse or civil partner) who is in partnership with a member, or with a member’s spouse or civil partner,
• a company, which is controlled by a member and/or persons connected with a member.
For HMRC reporting purposes, a connected person also includes close companies of which a member or another connected person is a director. A full definition is in section 1122 of the Corporation Taxes Act 2010.
By Scott Simpson
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