TC09518 - [2025] UKFTT 00528 (TC)

Fecha: 30-Abr-2025

Relevant law

Relevant law

The principal provision with which we are concerned is section 415(1) ITTOIA. It provides:

Charge to tax under Chapter 6

(1)

Income tax is charged if–

(a)

a company is or was chargeable to tax under section 455 of CTA 2010 (loans to participators in close companies etc.) in respect of a loan or advance, and

(b)

the company releases or writes off the whole or part of the debt in respect of the loan or advance.

Section 416 ITTOIA brings the sum identified in section 415 CTA into the charge to tax treating it as income. It is charged as dividend income pursuant to section 19 Income Tax Act 2007.

Also relevant are section 455 and 458 CTA. Section 455 provides that where a close company makes a loan or advances money to a participator there is due from the company an amount as if it were an amount of corporation tax on the company for the accounting period in which the loan is made of an amount equal to the upper dividend rate. The amount charged under section 455 is relieved under section 458 when and if the underlying loan or advance is “repaid”, or “released or written off”.