Commentary

E1.424 Release of loan by close company—charge to corporation tax and income tax

Personal and employment tax

E1.424 Release of loan by close company—charge to corporation tax and income tax

Release of loan by close company

E1.424 Release of loan by close company—charge to corporation tax and income tax

Where a close company makes a loan or advance to a qualifying participator (D3.402, there are special rules which tax the company and, in certain situations the participator. These are discussed in detail in Division D3.4, but in outline are as follows:

  1.  

    •     where the loan is by the close company to an individual or a trustee who is a participator, then on the making of the loan, the company is charged to tax (as if it were corporation tax)

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