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HMRC internal manual

Company Taxation Manual

Close companies: loans to participators: treating loan as made by another company


Where CTA10/S460 applies, a loan made by one company is to be treated as made by another company.

CTA10/S455 and ITTOIA05/S415 raise a number of questions that have to be asked of the company that ‘made the loan’. The company which made the loan is the company that:

  • actually made the loan or advance, or
  • on the incurring or assigning of a debt, is regarded as having made a loan (CTA10/S455 (4)).

The provisions of CTA10/S455 (4) are extended to companies that are not close by CTA10/S460 (7). For example, where a debt is assigned to a non-resident company controlled by a close company, the debt is firstly treated by CTA10/S455 (4) and CTA10/460 (7) as a loan made by the non-resident company. It may then be treated by CTA10/S460 (1) as a loan made by the close company. In this case, the questions have to be asked with regard to the non-resident company.

The questions to ask are whether:

  • the company making the loan did so otherwise than in the ordinary course of a business carried on by it which includes the lending of money
  • the loan or any part of it has been repaid to the company
  • the company has released or written off the whole or part of the debt in respect of the loan