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Section 404(2) to (3) ITEPA 2003

This guidance explains which employers are “associated�. EIM13530 explains that payments and benefits from associated employers must be aggregated before applying the £30,000 threshold.

Employers are associated if, on a “termination or change date� (as defined inthe last bullet below):

• Test A: one employer is under the control of the other â€� see example 1 at EIM13965, or
• Test B: one employer is under the control of a third person who controls, or is controlled by, the other employer â€� see example 2 at EIM13965, or
• Test C: on a different “termination or change dateâ€� one employer is under the control of a third person who controls, or is controlled by, the other employer â€� see example 3 at EIM13965

For this purpose:

• “controlâ€� means the ability to exercise control over the affairs of a company, etc whether by possessing the greater part of the issued share capital or voting power, or otherwise (see EIM20213)
• “personâ€� (singular) is to be read as including “personsâ€� (plural) â€� s6 Interpretation Act 1978 (so that, for example, Test B above is satisfied if the employers are under the control of the same persons)
• employer and person controlling or controlled by an employer include their successors
• “termination or change dateâ€� means the date of the termination or change giving rise to the payment or benefit being considered. For example, if you are looking at a redundancy payment made on 1 March 2004 in respect of an employment that ended on 1 January 2004, the “termination or change dateâ€� is 1 January 2004