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HMRC internal manual

Company Taxation Manual

From
HM Revenue & Customs
Updated
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CTSA: Loans to participators: CTPF -repayment interest

Tax that is repaid as a consequence of a claim under ICTA88/S419 (4) may carry:

  • repayment interest under ICTA88/S826, if the loan or advance was made in an accounting period ending after 30 September 1993,
  • repayment supplement under ICTA88/S825, if the loan or advance was made in an accounting period ending on or before 30 September 1993.

Loans made in accounting periods ending on or after 31 March 1996

For loans made in accounting periods ending on or after 31 March 1996 repayment interest under ICTA88/S826 (4) is due from the later of:

  • nine months after the accounting period in which the loan was made,
    • if the loan is repaid (or released or written off on or after 6 April 1999) earlier than nine months and one day after the end of that accounting period,

or

  • nine months after the accounting period in which the loan (or part) was repaid (or released or written off on or after 6 April 1999),
    • if the loan was repaid (or released or written off on or after 6 April 1999) more than nine months after the end of the accounting period in which it was made,

and

  • the date on which the tax to be repaid was paid.

You have to make these repayments manually. It is, therefore your responsibility to advise the clerical section of the dates from which repayment supplement or interest is payable.

Loans made in accounting periods ending before 31 March 1996

ICTA88/S826 (4)

For loans made in accounting periods ending on or after 1 October 1993 to 30 March 1996 repayment interest is due from the later of:

  • the date the loan (or part) was repaid (or released or written off on or after 6 April 1999), or
  • the date on which the tax to be repaid was paid.

You have to make these repayments manually and it is your responsibility to advise the clerical section of the date from which repayment interest is payable.

Loans made in accounting periods ending before 1 October 1993

ICTA88/S825 (3), (4), (8)

For loans made in accounting periods ending on or before 30 September 1993, repayment supplement applies to any claim to repayment under ICTA88/S419(4). The “material date” is the CT due date for the accounting period in which the loan was repaid.

Repayment supplement is payable from the relevant date which will always be the later of:

  • the first anniversary of the material date, or
  • the next anniversary of the material date that occurs after the date the tax was paid.

You have to make these repayments manually. It is, therefore your responsibility to advise the clerical section of the date from which repayment supplement is payable.