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Back to basics: tax on loans to participators

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CTA 2010 s 455 broadly subjects loans by a company to participators and associated persons to tax at an income tax rate, but chargeable on the company as if it were corporation tax. The tax is eligible for repayment once the loan is repaid. The charge extends to indirect loans and advantages as a result of a loan. There are exceptions for de minimis amounts where the individual works full time for the company and has no material interest in it. Points to watch in practice include payment dates, repayments, waivers, cheap loans, multiple accounts and management buyouts.
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