Corporation Tax Act 2009 section 375

Loans to close companies by participators etc

Section 375 sets out when late interest rules apply to loans made to close companies by their participators or connected persons, subject to exceptions for certain collective investment scheme arrangements and additional conditions where the creditor is based in a non-qualifying territory.

• The section applies where the borrowing company is a close company and the lender is a participator, their associate, or a company they control or have a major interest in
• The section does not apply if the borrower is a CIS-based close company (or the debt is owed to a CIS limited partnership), provided certain residency and size conditions are met
• Where the creditor is a company resident or effectively managed in a non-qualifying territory, an additional condition must be satisfied for the section to apply
• Section 376 provides further definitions needed to interpret the terms used in this section