UK: corporation tax, small companies' rate - proposed reform to the associated companies' test

HM Treasury and HMRC have published a consultation paper setting out a proposed new test for determining whether companies are associated for the purposes of the small companies' rate of corporation tax. Where a company is deemed to be associated with other companies the corporation tax thresholds are reduced. The purpose of reform (to quote from the consultation paper (at para. 3.3):

... is to provide a test that retains those aspects of the current test that work well within a new test that attributes rights held between linked persons only in circumstances where actual links between the companies make it appropriate to do so. Put broadly, the new test seeks to ensure that companies cannot be associated by an attribution of rights by mere ‘accident of circumstance’".