a a child of the person under 18 years of age, unless the person can establish otherwise; b a bare trustee; and c a person who has entered into an arrangement or understanding with that person with respect to the holding or exercising of rights or powers. 2.7 Definition of "Associated Persons" 2.7.1 A nominee of a person is in effect that person's agent. The definition of associated persons aims to embrace persons who are not related as principal and agent but who, because of their personal or economic relationship, can reasonably be assumed to have similar economic interests. For example, two companies owned by the same shareholders may not be related as principal and nominee but will nevertheless have substantially similar if not identical economic interests. They should therefore be treated as associated persons. 2.7.2 In the context of the BE regime, we propose that interests in foreign companies held by associated persons be aggregated for the purposes of the control test, but not for the purposes of income attribution. The income attributed to any person would depend only on the interests that the person holds directly, through nominees, or through other controlled foreign companies. (Interests held by the nominees of a person should be aggregated with that person's own direct and indirect interests for the purposes of determining both the control and income interests of the person.) 2.7.3 The present Act contains a general definition of associated persons in section 8. In brief, this section defines associated persons as any two companies which consist of substantially the same shareholders or that are under the control of the same persons; a person and a company where that person owns 25 percent or more of the shares in the company; two persons who are relatives; and a person and a partnership where that person is associated with a partner. This definition is not appropriate for the purposes of the BE regime. First, the relationship between two companies or another person and a company needs to be extended and defined in terms of the rights and powers to be taken into account in determining
a a child of the person under 18 years of age, unless the person can establish otherwise; b a bare trustee; and c a person who has entered into an arrangement or understanding with that person with respect to the holding or exercising of rights or powers. 2.7 Definition of "Associated Persons" 2.7.1 A nominee of a person is in effect that person's agent. The definition of associated persons aims to embrace persons who are not related as principal and agent but who, because of their personal or economic relationship, can reasonably be assumed to have similar economic interests. For example, two companies owned by the same shareholders may not be related as principal and nominee but will nevertheless have substantially similar if not identical economic interests. They should therefore be treated as associated persons. 2.7.2 In the context of the BE regime, we propose that interests in foreign companies held by associated persons be aggregated for the purposes of the control test, but not for the purposes of income attribution. The income attributed to any person would depend only on the interests that the person holds directly, through nominees, or through other controlled foreign companies. (Interests held by the nominees of a person should be aggregated with that person's own direct and indirect interests for the purposes of determining both the control and income interests of the person.) 2.7.3 The present Act contains a general definition of associated persons in section 8. In brief, this section defines associated persons as any two companies which consist of substantially the same shareholders or that are under the control of the same persons; a person and a company where that person owns 25 percent or more of the shares in the company; two persons who are relatives; and a person and a partnership where that person is associated with a partner. This definition is not appropriate for the purposes of the BE regime. First, the relationship between two companies or another person and a company needs to be extended and defined in terms of the rights and powers to be taken into account in determining