Corporation Tax Act 2010 section 460

Loan treated as made by close company

Section 460 extends the scope of the tax charge on loans to participators by treating loans made by a controlled subsidiary as if they had been made by the controlling close company.

• Where a company (C) that is controlled by a close company makes a loan that would not otherwise attract a tax charge under section 455, the loan is treated as if it had been made by the controlling close company, bringing sections 455 to 459 into play
• If C is not controlled by a close company at the time of the loan but a close company later acquires control, the loan is treated as having been made by that close company immediately after it gained control
• Where two or more close companies jointly control C, the loan is treated as made by each of them, but is apportioned between them in proportion to the nature and size of their respective interests in C
• References to a company making a loan in this section and related sections 461 and 462 also cover situations where a company is treated as making a loan under section 455(4), regardless of whether it is itself a close company