Loans by close company are taxed as distributions when released

Section 455 CTA 2010

CTM61500 onwards explains the treatment of a loan or advance by a close company to a participator (or an associate of a participator) in the company – broadly this means a shareholder or a relative or a partner of a shareholder.

A loan or advance is assessable on the company under CTA10/S455 (CTM61505). Where this is wholly or partly released or written off, the company will get relief under CTA10/S458. A charge to tax under ITTOIA05/PART4/CHAPTER6 then applies to the participator.

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