Introduction Overview Chapter 3: Charge to tax in case of loan to participator Section 455: Charge to tax in case of loan to participator
1378.This section imposes a charge to tax if a close company makes a loan, or advances money, to a participator or an associate of a participator. It is based on section 419(1) to (3), (6) and (7) of ICTA.
1379.Subsection (1) states when this section applies. It uses the expression “relevant person”, which is defined in subsection (6).
1380.Subsection (2) imposes the charge.
1381.Subsection (3) states when the tax is due and payable.
1382.Subsection (4) extends the scope of the charge. It is based on section 419(2) of ICTA, which is expressed to apply for the purposes of that section. Subsection (4) is expressed to apply for the purposes of, among other things, section 456 – that is, including the provisions of that section which are based on section 420 of ICTA. Since section 420 of ICTA makes exceptions to section 419 of that Act, defining the scope of subsection (4) in this way does not change the law.
1383.Subsection (5) extends the circumstances in which a person is treated as being a participator in a company.