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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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Close companies: loans to participators: by controlled companies


Section 460 brings certain loans not otherwise chargeable within CTA10/S455 and ITTOIA05/S415.

The loans affected are loans made under arrangements in which:

  • a loan is made by a third party to a close company participator or associate of a participator


  • the close company effectively finances the making of the loan.

Such arrangements normally involve the close company having or acquiring control of the lender. As such, the application of CTA10/S460 is limited to loans made to participators in a close company (or their associates) by a company that is, or comes to be, under the control of the close company.

You should construe CTA10/S460 as one with CTA10/S455. Any reference in Section 460 to a ‘loan’ includes an advance. Similarly, any reference to a company making a loan includes cases in which a company is, or if it were a close company would be, regarded as making a loan by virtue of CTA10/S455 (4).

The powers of information in FA08/SCH36 (CTM61505) apply to CTA10/S460 just as they do to CTA10/S455.