Corporation Tax Act 2010 section 464ZA

Treatment of certain repayments

Section 464ZA is an anti-avoidance rule that prevents close companies from exploiting the repayment relief rules by treating certain loan repayments as if they were repayments of replacement loans, thereby denying the expected tax relief.

• Where a close company receives repayments of at least £5,000 on loans to a person, and within 30 days new loans of at least £5,000 are made to that person or an associate in a later accounting period, the repayment is re-characterised as a repayment of the new loans instead
• Where the total amount owed by a person to a close company is £15,000 or more and a repayment is made at a time when arrangements exist for replacement loans of at least £5,000 to that person or an associate, the repayment is similarly re-characterised as a repayment of the replacement loans
• Each amount within a loan or repayment can only be matched once under these rules, preventing double counting through the concepts of "available amount" and "qualifying amount"
• The rule does not apply where the repayment already gives rise to an income tax charge on the participator or associate, and the Treasury has the power to change the monetary thresholds by order

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