Income Tax (Trading and Other Income) Act 2005 section 415

Charge to tax under Chapter 6

Section 415 imposes an income tax charge when a close company writes off or releases a loan that was made to a participator and which was subject to a tax charge under section 455 of CTA 2010.

• An income tax charge arises when a close company releases or writes off all or part of a debt relating to a loan or advance that was (or is) subject to a section 455 CTA 2010 charge on loans to participators
• This charge is subject to relief under section 418, which prevents double taxation where borrowers are liable as settlors under the settlements legislation
• Where a loan was treated as made by a controlling close company ("A") rather than the company that actually made it ("B"), any release or write-off by B is treated for these purposes as made by A
• All terms used in this chapter carry the same meanings as they do for the purposes of section 455 of CTA 2010