EIM47010 - Para 1(1), (4) and (5): loan charge relevant step: conditions

Schedule 11 Finance (No 2) Act 2017

There are a number of conditions which need to be satisfied in order to deem a relevant step to have been taken in relation to the loan charge.

• A person (“P”) will have made a loan or quasi-loan to a relevant person.
• That loan or quasi-loan will have been made at some point on or after 9 December 2010.
• An amount of the loan or quasi-loan is outstanding immediately before the end of 5 April 2019.

The terms “loan” and “quasi-loan” are defined in Para 2 Sch 11 – see EIM47030 and EIM47035.

For the purposes of this section, the definition of a relevant person is the same as is used in relation to relevant steps taken under section 554C – see section 554C(2) and (3) ITEPA 2003 and EIM45090.

Where loans or quasi-loans have been made by more than one person to a relevant person, each loan will have to be considered separately. There may be a number of different relevant steps taken by different P’s which will each be treated as involving a sum of money for the purposes of valuing the relevant step under section 554Z3 (see EIM45710).

The term “outstanding” has a specific meaning and is defined in Paras 3 to 5. For details of how to determine what amount of a loan or quasi-loan is outstanding, see EIM47045 and EIM47070.