The provisions addressing the tax implications of loans to participators hinge on two key definitions — namely what is a qualifying participator and what is a qualifying loan. Both of these key concepts are discussed below.
Qualifying participators
A qualifying participator is1:
- Ìý
•ÌýÌýÌýÌý an individual or company receiving the loan in a fiduciary or representative capacity who is a participator or an associate of a participator
- Ìý
•ÌýÌýÌýÌý the trustees of a settlement where one or more of the trustees or actual or potential beneficiaries of which is a participator in the company or an associate of such a participator, or
- Ìý
•ÌýÌýÌýÌý LLPs or other partnerships where at least one of the partners is an individual and that individual is a participator in the close company making the loan or an associate of an individual who is a participator in the close company
From these definitions it is clear that loans or advances via intermediaries are specifically within the close company tax charge.
Example
An
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Web page updated on 17 Mar 2025 17:11