In his 2015 Autumn Statement the chancellor announced a new exemption from a loans to participators charge when loans are made by close companies to the trustees of charities.

Loans made on or after 25 November 2015 are exempted from a s455 CTA 2010 charge where the loan is being used for wholly charitable purposes.

This measure will affect some close companies which are part of an ownership structure which includes companies, trustees and a charity, and which make loans to their participators (shareholders).

  • Loans made by close companies to its participators are subject to a tax charge under s455 CTA 2010.  
  • Loans which benefit individuals personally will not be exempt.
  • Legislation to create the exemption from the s455 charge is introduced by clause 47 of the Finance Bill 2016.

See our Close company loans toolkit for further details.