Kevin Read outlines an upcoming increase in the tax charge under the ‘loans to participators’ provisions for companies.
There is a corporation tax (CT) charge (CTA 2010, s 455) on loans made to ‘participators’ in close companies that are outstanding at the end of a CT accounting period (CTAP).
This charge used to be at a fixed rate, which Chancellors changed from time to time. However, some years ago George Osbourne altered this principle (in FA 2016, s 50), instead setting the rate at ‘such percentage of the amount of the loan or advance as corresponds to the dividend upper rate
