COM53131 - Claims/reliefs: other reliefs: S458 CTA 2010 Examples
Example 1
Example 2
Example 3
Example 4
Example 5
Example 6
Example 1
Loan repaid during the AP in which it was made
A Ltd, a close company, makes a loan of £10,000 to a participator during the AP ended 31/12/2021. The loan is repaid in full during the AP. The company delivers its CT600 return on time.
the company does not complete the CT600A supplementary pages because the loan was repaid within the AP
Box 450 is therefore left blank
there are no S455 consequences for the AP
Example 2
Loan repaid before 9 months and 1 day after the AP in which it was made
A Ltd, a close company, makes a loan of £10,000 to a participator during the AP ended 31/12/2021. The participator repays £6,000 of the loan during the AP ended 31/12/2021 and the balance of £4,000 on 30/06/2022.
the company completes the CT600A supplementary pages because the loan was not repaid within the AP. The CT600A shows the following entries
Box | Description | Amount |
Part 1 |
|
|
A2 | Total loans within S455 CTA 2020 made during the return period which have not been repaid before the end of the period | £4,000 |
A3 | S455 tax chargeable on loans (A2 multiplied by 25%) | £1,000 |
Part 2 |
|
|
A4 | Total (Amount repaid) | £4,000 |
A6 | Total amount of loans made during the return period which have been repaid earlier than 9 months and 1 day after the end of the period | £4,000 |
A7 | S458 relief due for loans repaid after the end of the period but earlier than 9 months and 1 day after the end of the period (A6 multiplied by 25%) | £1,000 |
Part 3 |
|
|
A13 | Tax payable under S455 CTA 2010 (A3 less A7) | £0.00 |
The company copies the figure in box A13 (£0.00) to box 79 of the CT600 Version 2
There are no S455 consequences for the AP.
Example 3
Loan repaid more than 9 months and 1 day after the AP in which it was made - return delivered on time.
Background
A Ltd, a close company, makes a loan of £10,000 to a participator during the AP ended 31/12/2011. The participator repays £6,000 of the loan during the AP ended 31/12/2011, £1,500 on 30/06/2012, and the balance of £2,500 on 31/10/2012. The company delivers its return on 31/12/2012.
A Ltd is not entitled to S458 relief on the balance of £2,500 at the time that it makes its return. The loan was repaid more than 9 months after the end of the AP in which it was made and relief is deferred under S458(5) until 01/10/2013. The company does not include the claim in its return, nor does it pay the S455 liability.
A Ltd claims the relief in October 2013 by amending its return.
CT600A Entries
The CT600A shows the following entries
Box | Description | Amount |
Part 1 |
|
|
A2 | Total loans within S455 CTA 2010 made during the return period which have not been repaid before the end of the period | £4,000 |
A3 | S455 tax chargeable on loans (A2 multiplied by 25%) | £1,000 |
Part 2 |
|
|
A4 | Total (Amount repaid) | £1,500 |
A6 | Total amount of loans made during the return period which have been repaid earlier than 9 months and 1 day after the end of the period | £1,500 |
A7 | S458 relief due for loans repaid after the end of the period but earlier than 9 months and 1 day after the end of the period (A6 multiplied by 25%) | £375.00 |
Part 3 |
|
|
A8 | Total (Amount repaid) | blank |
A10 | Total amount of loans made during the return period which have been repaid more than 9 months after the end of the period and the relief is due now | blank |
A11 | S458 relief due now for loans repaid more than 9 months after the end of the period (A10 multiplied by 25%) | blank |
Part 5 |
|
|
A13 | Tax payable under S455 CTA 2010 (A3 less total of A7 and A11) | £625.00 |
Company Action
The company
Leaves box 80 of the CT600 version 2 blank as it has not completed Box A11
Copies the figure in Box A13 (£625.00) to box 79
Enters the total self assessed tax payable, including S455, in box 79 as £5625.00
COTAX Action
COTAX
Updates the assessment record, and posts the S455 charge as a separate entry (which can be viewed with Function VPPD - as posting S4C)
The postings are as follows
Posting Type | Meaning | Amount |
S4C | Section 455 | 625.00 |
SAM | Self Assessment | 5000.00 |
Note: The SAM posting is net of Section 455 tax payable
Amended Return
In October 2013, A Ltd claims S458 relief, by amending its return, for the £2,500 balance of the loan repaid on 31/10/2012.
CT Co-ordinator Action
The CT Co-ordinator
Uses the ‘Record a Taxpayer Amendment’ option in Function RAMA (Record / Amend Assessment) to give effect to the claim
Makes the following changes on screen COT121N
Field name | Computer shows (‘This Asst.’ column) | Inspector enters |
Section 419(1) (read as S455) | 625.00 | no change |
S419(4) Claim? (read as S458 Claim?) | Blank | no change |
S419(4) AP ended (read as S458 AP ended) | Blank | 31/12/2012 |
S419(4) Relief (read as S458 Relief) | Blank | 625.00 |
The CT Co-ordinator then
Confirms the assessment issuing details on screen COT120I
(COTAX displays an advisory message instructing you to review the interest position and send a CT250(P) to the Accounts Office)
Completes the CT250(P) showing
Company name | A Ltd |
Office number and UTR | 225 22500 12345 |
AP No | 05 |
APE | 31/12/2011 |
S419(4) Relief | From APE | Date loan repaid | Date tax paid | Interest effective date |
625.00 | 31/12/2012 | 31/10/2012 | tax not paid | 01/10/2012 See Note |
Note: S458 relief on the part of the loan repaid after the due date of the AP in which the loan was made is deferred under Section 458 until 01/10/2013. Late payment interest, however, runs from 01/10/2012 (the due date of the AP in which the loan was made) to 31/10/2012 (the date the loan was repaid, as in this case, the tax was not paid).
Postings
The computer updates the assessment record, and posts the S455 charge and S458 relief as separate entries (S4C and S4R), which can be viewed with Function VPPD (View Payment and Postings Details)
The postings are as follows
Posting Type | Meaning | Amount |
S4R | Section 458 carried back | 625.00 |
S4C | Section 455 | 625.00 |
SAA | Amended Self Assessment | 5000.00 |
SAM | Self Assessment | - 5000.00 |
S4C | Section 455 | - 625.00 |
S4C | Section 455 | 625.00 |
SAM | Self Assessment | 5000.00 |
Note: The SAM and SAA postings are net of Section 455 tax payable.
Example 4
Loan repaid more than 9 months and 1 day after the AP in which it was made - return includes a S458 claim before relief is due
Background
A Ltd, a close company, makes a loan of £10,000 to a participator during the AP ended 31/12/2011. The participator repays £6,000 of the loan during the AP ended 31/12/2011, £1,500 on 30/06/2012, and the balance of £2,500 on 31/10/2012. The company delivers its return on 31/12/2012.
A Ltd claims S458 relief on the balance of £2,500 at the time that it makes its return. However, the relief should be deferred under Section 458(5) until 01/10/2013 because the balance of the loan was repaid more than 9 months after the end of the AP in which the loan was made.
CT600A Entries
The CT600A shows the following entries
Box | Description | Amount |
Part 1 |
|
|
A2 | Total loans within S455 CTA 2010 made during the return period which have not been repaid before the end of the period | £4,000 |
A3 | S455 tax chargeable on loans (A2 multiplied by 25%) | £1,000 |
Part 2 |
|
|
A4 | Total (Amount repaid) | £1,500 |
A6 | Total amount of loans made during the return period which have been repaid earlier than 9 months and 1 day after the end of the period | £1,500 |
A7 | S458 relief due for loans repaid after the end of the period but earlier than 9 months and 1 day after the end of the period (A6 multiplied by 25%) | £375.00 |
Part 3 |
|
|
A8 | Total (Amount repaid) | £2,500 |
A10 | Total amount of loans made during the return period which have been repaid more than 9 months after the end of the period and the relief is due now | £2,500 |
A11 | S458 relief due now for loans repaid more than 9 months after the end of the period (A10 multiplied by 25%) | £625.00 |
Part 5 |
|
|
A13 | Tax payable under S455 CTA 2010 (A3 less total of A7 and A11) | £0.00 |
Note: Supplementary pages are not captured onto COTAX
Company Action
The company
Puts an ‘X’ in box 80 of the CT600 Version 2 because it has completed Box A11
Copies the figure in Box A13 (£0.00) to box 79
Enters the total self assessed tax payable, including S455, in box 79 as £5000.00
Clerical Action
COTAX treats the ‘X’ in box 80 as evidence that a figure in the return has been stated net after a ‘carry-back’ and does not automatically record the self assessment. It puts the case on the Record Self Assessment Work List (RSAW) for review.
The CT Co-ordinator
Reviews the RSAW Work List and establishes that the case is listed because of the entry in box 80
Uses the ‘Record a self assessment’ option in Function RAMA (Record / Amend Assessment) to record the self assessment
At screen COT121N, COTAX displays an advisory message advising you that box 80 has been completed and showing the actions required to make sure the postings on the record are correct. You must follow these instructions.
Note: The COTAX message refers to S419(4A) ICTA 1988 and box 65 of the CT600. You should read S419(4A) ICTA 1988 as S458(5) CTA 2010, which is the legislation that superseded it. You should also read box 65 as box 80, as the CT600 box numbers were revised when Version 2 was introduced.
Entries required for this example
Field name | Computer shows (‘This Asst.’ column) | Inspector enters | From CT600A |
Section 419(1) (read as Section 455) | 0.00 | 625.00 | Deducts Box A7 from Box A3 |
S419(4) Claim? (read as S458 Claim?) | X | blank | ---- |
The CT Co-ordinator then
Enters this message in the free format message fields on screen COT121G
‘S458 relief for £2500 repaid 31/10/2012 deferred under S458(5) CTA 2010 until 01/10/2013
Confirms the assessment issuing details, on screen COT120I
Sets a BF until 01/10/2013 to deal with the deferred S458 relief
COTAX then
Records the corrected self assessment and issues a correction notice showing the amended figures, £5625.00, and the free format message
Example 5
Loan repaid more than 9 months and 1 day after the AP in which it was made - for S458 relief claimed by amendment to the return, after the time limit for amendment has expired
A Ltd, a close company, makes a loan of £10,000 to a participator during the AP ended 31/12/2011. The participator repays £6,000 of the loan during the AP ended 31/12/2011, £1,500 on 30/06/2012, and the balance of £2,500 on 31/10/2012. The company delivers its return on 31/12/2012.
A Ltd cannot claim S458 relief on the balance of £2,500 at the time that it makes its return. It was repaid more than 9 months after the end of the AP in which the loan was made and relief is not due until 01/10/2013.
A Ltd claims S458 relief in January 2014, by amending its return, for the £2,500 balance of the loan repaid on 31/10/2012.
The Inspector
Writes to the company to Acknowledge receipt of the amendment
And
Explain that the time limit (under Paragraph 15 (4) Schedule 18 FA 1998) for amending the return has expired, but that effect can be given to the claim under Schedule 1A TMA 1970
Uses Function RAMA (Record / Amend Assessment) Process a Claim option, to give effect to the claim
Example 6
Loan repaid more than 9 months and 1 day after the AP in which it was made - return delivered late
Background
A Ltd, a close company, makes a loan of £10,000 to a participator during the AP ended 31/12/2011. The participator repays £6,000 of the loan during the AP ended 31/12/2011, £1,500 on 30/06/2012, and the balance of £2,500 on 31/10/2012. As the balance was repaid more than 9 months after the end of the AP in which the loan was made, the relief is not due until 01/10/2013.
The company delivers its return late, in November 2013, and claims S458 relief for the loan balance of £2,500 repaid on 31/10/2012.
CT600A Entries
The company
Completes the CT600A supplementary pages because the loan was not repaid within the AP. The CT600A shows the following entries
Box | Description | Amount |
Part 1 |
|
|
A2 | Total loans within S455 CTA 2010 made during the return period which have not been repaid before the end of the period | £4,000 |
A3 | S455 tax chargeable on loans (A2 multiplied by 25%) | £1,000 |
Part 2 |
|
|
A4 | Total (Amount repaid) | £1,500 |
A6 | Total amount of loans made during the return period which have been repaid earlier than 9 months and 1 day after the end of the period | £1,500 |
A7 | S458 relief due for loans repaid after the end of the period but earlier than 9 months and 1 day after the end of the period (A6 multiplied by 25%) | £375.00 |
Part 3 |
|
|
A8 | Total (Amount repaid) | £2,500 |
A10 | Total amount of loans made during the return period which have been repaid more than 9 months after the end of the period and the relief is due now | £2,500 |
A11 | S458 relief due now for loans repaid more than 9 months after the end of the period (A10 multiplied by 25%) | £625.00 |
Part 5 |
|
|
A13 | Tax payable under S455 CTA 2010 (A3 less total of A7 and A11) | £0.00 |
Note: The supplementary pages are not captured onto COTAX
The company
Puts an ‘X’ in box 80 of the CT600 Version 2 because it has completed box A11
Copies the figure in box A13 (£0.00) to box 79
Enters the total self assessed tax payable, including S455, in Box 86 as £5000.00
Clerical Action
COTAX treats the ‘X’ in box 80 as evidence that a figure in the return has been stated net after a ‘carry-back’ and does not automatically record the self assessment. It puts the case on the Record Self Assessment Work List (RSAW) for review.
The CT Co-ordinator
Reviews the RSAW Work List and establishes that the case is listed because of the entry in box 80
Uses the ‘Record a self assessment’ option in Function RAMA (Record / Amend Assessment) to record the self assessment
At screen COT121N, COTAX displays an advisory message advising you that box 80 has been completed and showing the actions required to make sure the postings on the record are correct. You must follow these instructions.
Note: The COTAX message refers to S419(4A) ICTA 1988 and box 65 of the CT600. You should read S419(4A) ICTA 1988 as S458(5) CTA 2010, which is the legislation that superseded it. You should also read box 65 as box 80, as the CT600 box numbers were revised when Version 2 was introduced.
Entries required for this example
Field name | Computer shows (‘This Asst.’ column) | Inspector enters | From CT600A
|
Section 419(1) (to be read as S455) | 0.00 | 625.00 | Deducts Box A7 from Box A3 |
S419(4) Claim? (to be read as S458 Claim?) | X | blank | ---- |
S419(4) AP ended (to be read as S458 AP ended) | Blank | 31/12/2012 | ---- |
S419(4) Relief (to be read as S458 Relief) | Blank | 625.00 | Box A11 |
You must then
Confirm the assessment issuing details on screen COT120I
(COTAX displays an advisory message telling you to review the interest position and complete a form CT250(P))
Complete the CT250(P) showing
Company name | A Ltd |
Office number and UTR | 225 22500 12345 |
AP No | 05 |
APE | 31/12/2011 |
S419(4) Relief | From APE | Date loan repaid | Date tax paid | Interest effective date |
625.00 | 31/12/2012 | 31/10/2012 | tax not paid | 01/10/2012 |
Notes:
S419(4) will be amended to S458 on this form in due course.
S458 relief on the part of the loan repaid after the due date of the AP in which the loan was made is deferred under Section 458(5) until 01/10/2013.
Late payment interest under S87A TMA 1970, runs from 01/10/2012 (the due date of the AP in which the loan was made) to 31/10/2012 (the date the loan was repaid)
COTAX Action
When you have completed the assessing function, COTAX
Updates the assessment record, and posts the S455 (shown as S419) charge and S458 (shown as S419(4)) relief as separate entries (with posting types of S4C and S4R), which can be viewed with Function VPPD (View Payment and Postings Details)
The postings are as follows
Posting Type | Meaning | Amount |
S4R | Section 458 carried back | 625.00 |
S4C | Section 455 | 625.00 |
SAM | Self Assessment | 5000.00 |
Note: The SAM posting is net of Section 455 tax payable.