PM211400 - Loans to participators

The application of the rules at S455 et seq to partnerships and LLPs is a complex area. Detailed guidance is available at CTM61520.

There may be cases where amounts which have been allocated to a corporate partner meet the conditions to be within s455/464A CTA 2010, and also meet the conditions at S850C ITTOIA 2005. A reallocation under s850C will result in profits being reallocated from a corporate partner to one or more individual partners. Amounts which are reallocated under s850C(4) will be charged to Income Tax on the individual(s). Any amounts which have been reallocated and charged to IT will not fall to be charged under s455/464A.

If there are amounts which fall within s455/464A, and are above the amounts charged to IT under s850C, these amounts are still capable of falling within the legislation at s455/464A.

Before making an assessment under s455/464A or s850C, compliance staff should check with the relevant team to ensure that a previous assessment under the other provision has not already been made.