The GAAR Advisory Panel have released an opinion on 'artificial repayment of a loan or advance to a participator' concludes that entering into and carrying out the scheme was not a reasonable course of action.

The following case was submitted to the General Anti-Abuse Rule (GAAR) Advisory Panel for its consideration: 

The GAAR Advisory Panel concluded that the GAAR should apply as:

The Panel said the taxpayers had devised a contrived way of circumventing the s.455 rules and that the entering into or carrying out the tax arrangements was not a reasonable course of action.

Useful guides on this topic

Directors' loan accounts: Toolkit (freeview)
A freeview toolkit with planning points for directors' loans accounts.

Directors' loan accounts: Toolkit (subscribers)
An enhanced subscriber toolkit with planning points for directors' loan accounts.

Close company loans toolkit (loans to participators)
This guide takes a detailed look at the Corporation Tax treatment when a close company makes a loan to a participator (director-shareholder). 

General Anti-Abuse Rule (subscriber version)
This briefing note looks at the key features of the General Anti-Abuse Rule (GAAR), what areas of tax it covers and what you need to know about the provisions it contains when considering tax planning.

External Link

GAAR Advisory Panel Opinion of 16 December 2020


Squirrel ad


Are you enjoying our content? 

Thousands of accountants and advisers and their clients use www.rossmartin.co.uk as their primary TAX resource.

Register with us now to receive our receive our FREE SME Topical Tax Update & newletter