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HMRC internal manual

Company Taxation Manual

CTSA: Loans to participators: General

CTSA accounting periods

Under CTSA, a company has to include CTA10/S455 liability in its company tax return and SA.

If you need to query any Section 455 aspect, you must do so by opening an enquiry. Depending on the case this enquiry may be either into the return, or into a claim for relief under CTA10/S458, (see CTM98220). For guidance on making enquiries involving Section 455, see EM8630.

Section 455 liability is subject to the same interest rules as other company tax liabilities (TMA70/S87A and TMA70/S109 (3)). Under CTSA the penalty provisions for late filing of Section 455 liabilities are the same as for CT liabilities. But, all other penalties under CTSA in respect of Section 455 are only chargeable when the loan has not been repaid, released or written off within 9 months of the end of the accounting period in which the loan was made.

See EM4500 onwards and CTM98225 when you consider penalties for delivering an incorrect or late return.

A close company that makes a loan during an accounting period:

  • that attracts Section 455 liability, and
  • that has not been repaid within the period,

must complete the return supplementary pages “CT600A”.

Part 1 of the supplementary pages is used to show details of loans made during the return period. Parts 2 and 3 deal with Section 458 claims (see CTM98225). The On-line Company Tax Manual (COM) gives further information on the supplementary pages, Section 455 calculations, and dealing with claims to relief under Section 458.

CTPF accounting periods

As with CTSA accounting periods, ICTA88/S419 liability (the predecessor to section 455) is subject to the interest rules of TMA70/S87A (TMA70/S109 (3)) but the liability is not included in the CT assessment.

You make assessments using the old Company Tax Assessing system (CTA), see AC4520 and AC4815.

ICTA88/S419(4) claims in respect of loans made during a pre-CTSA accounting period continue to be dealt with under CTA, even if the loans are repaid, released or written off during a CTSA accounting period. But any enquiry you make into claims to relief for loans made in a pre-CTSA accounting period will be subject to TMA70/SCH1A, including the relevant time limits, if the claim is made in a CTSA accounting period. This is because the claim cannot be made in a return.