Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
, see all updates

Close companies: capital payments to settlors: interaction with CTA2010/S455 & CTA2010/S463

CTA2010/S455 (formerly ICTA88/S419) and CTA2010/S463 (formerly ICTA88/S421)

ITTOIA/S633 and CTA2010/S455 can both apply to the same transaction(s) or arrangement(s). However, Section 633 takes precedence over and displaces liability under Section 463 (CTM61630).

So, strictly, a transaction could give rise to a charge on the company and on the settlor.


Company B is owned 50% by individual D and 50% by the trustees of D’s settlement. When Company B lent money to D that transaction attracted:

  • a CTA2010/S455 charge on the company,


  • an ITTOIA/S633 assessment on the settlor; this assessment was based on the amount of the loan grossed at the aggregate of the basic and additional rates in force in the year of payment (ITTOIA/S640 (1)).

Unlike tax under Section 455, tax under Section 633 is not repayable in any circumstances, though ITTOIA/S638 provides for abatement of charge where the same money is loaned, repaid and loaned again.