Corporation Tax Act 2010 section 464C

Treatment of certain repayments and return payments

Section 464C sets out anti-avoidance rules that prevent close companies from claiming relief on loan repayments where those repayments are not genuine or enduring, by matching them against new chargeable payments made to the same or connected persons.

• The 30 Day Rule treats a repayment as made against a new chargeable payment where, within any 30-day window, the close company both receives repayments of at least £5,000 and makes new chargeable payments to the same person or their associate in a later accounting period than the original charge
• The Arrangements Rule applies where the 30 Day Rule does not, and catches repayments made under arrangements that result in a further chargeable amount being paid out to the participator, effectively re-lending the money
• Repayments and chargeable payments can only be matched once across both rules, and the 30 Day Rule must always be considered before the Arrangements Rule
• Repayments that give rise to an income tax charge on the participator or associate are excluded from these provisions, and the Treasury may vary the £5,000 and £15,000 thresholds by order