835J Meaning of control

Summary

A company that is not resident in the State will be considered a CFC where it is ‘controlled’ by a company or companies resident in the State. This section defines “control” for the purposes of Part 35B.

Details

(1) A person controls a company if the person is able to control or to acquire control, either directly or indirectly, of the company’s affairs. A person is regarded as having control of a company if the person has or is entitled to acquire—

• the majority of the issued share capital or voting power,
• such part of that capital as would entitle the person on a total distribution of income to more than 50 per cent of such distribution, or
• such rights as would entitle the person on a winding up or otherwise to more than 50 per cent of the distributable assets,
• or any part of the share capital and as a result be able to control the composition of the board of directors.

(2) A person is treated as entitled to acquire voting power, share capital or rights if that person is entitled to acquire those things in the future or will at a future date be entitled to acquire.

(3) The rights or powers of a nominee of a person are attributable to the person on whose behalf the nominee has those rights or powers.

(4) The rights and powers of a person and of the person’s associates are to be regarded as belonging to that person. The position is similar in relation to the rights and powers of any company which the person or the person and the person’s associates control. The rights and powers of nominees of an associate are also included but not those of associates of an associate. If this provision can be applied in such a way as to enable control of the company to be exercised by persons resident in the State, it is to be so applied.

(5) The terms ‘participator’, ‘associate’, ‘director’ and ‘loan creditor’ are given the same meaning as they have in Part 13.

Relevant Date: Finance Act 2021