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.

Documents

Draft legislation

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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.

Updates to this page

Published 30 October 2024

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