An LLP may be formed of individual members and corporate members, or it may work in close contact with a service company. When a Close company makes a loan to an LLP (or partnership) where a member or partner is also a participator in the close company, it had been argued that the LLP as a body corporate could not be a participator of the close company.

From 20 March 2013 a s455 CTA 2010  tax charge will apply if a close company makes a loan or advance to:

An LLP or other partnership, one or more of the members/partners in which is an individual who is:

  • A participator in the company, or
  • An associate of an individual who is such a participator

and the loan is still outstanding nine months from the end of the relevant accounting year end of the company.

See Close Company Loan Toolkit