Policy paper

Corporation Tax — close company shareholders — anti-avoidance measure

This measure is about an amendment to ensure that the Targeted Anti-Avoidance Rule in the loans to participators legislation remains robust and effective against avoidance.

• From: HM Revenue & Customs
• Published: 30 October 2024
• Last updated: 12 November 2024 — See all updates

Documents

Close company shareholders — anti-avoidance measure

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Draft legislation

PDF, 119 KB, 3 pages

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Draft legislation (accessible version)

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Details

The rules governing the charge on loans from close companies to, or benefits conferred on, their participators are found at Chapters 3, 3A and 3B of Part 10 Corporation Tax Act 2010 (CTA10). The purpose of this Loans to Participators regime is to deter companies from making untaxed loans to their participators or allowing them otherwise to extract company funds untaxed, rather than paying wages, dividends or other income chargeable to tax. The charge is on the close company at a current rate of 33.75% of any amounts outstanding 9 months after the end of the accounting period. The close company can claim relief for any s455 tax if the loan, other monies or value is repaid to the company.

Published 30 October 2024
Last updated 12 November 2024 + show all updates

1. 12 November 2024

   Accessible version of draft legislation has been added.

2. 30 October 2024

   First published.