Part 10

Close companies
Chapter 3

Charge to tax in case of loan to participator

Loan treated as made to participator

Loan treated as made to participator
459
1
This section applies if under arrangements made by a person (P)—
a
a close company makes a loan or advance which, apart from this section, does not give rise to a charge to tax under section 455, and
b
a person other than the close company makes a payment or transfers property to, or releases or satisfies (in whole or in part) a liability of, a relevant person who is a participator in the company or an associate of such a participator.
2
Sections 455 to 458 and 464ZA and 464ZB apply as if the loan or advance had been made to the relevant person.
3
But this section does not apply if—
a
the arrangements mentioned in subsection (1) are made by P in the ordinary course of a business carried on by P, or
b
the total income of the relevant person includes, in respect of the matter mentioned in subsection (1)(b), an amount not less than the loan or advance.
4
If a company (C) controls another company (D), a participator in C is to be treated for the purposes of this section as being also a participator in D.
Words in s. 459(2) inserted (retrospective to 20.3.2013) by Finance Act 2013 (c. 29), Sch. 30 para. 4(1)(2)
Pt. 10 applied (with modifications) (6.4.2014) by National Insurance Contributions Act 2014 (c. 7), s. 8, Sch. 1 Pt. 1
Pt. 10 Chs. 3-3B applied (24.2.2022) by Finance Act 2022 (c. 3), Sch. 2 para. 37
Words in s. 459(2) substituted (30.10.2024) by Finance Act 2025 (c. 8), s. 81(3)(d)(4)