Loans to Participators Rules - Understanding the Complexities

Introduction

Where a participator lends to a close company, the company is liable to a punitive corporation tax charge far exceeding the normal corporation tax rate. Sounds simple enough, or does it?

Many questions arise after such arrangement is set up and the consequences can be significant. In this session, we hope to address all those questions, in light of recent cases and GAAR Panel opinions on the subject, with a view to creating a roadmap to circumnavigate the issues in advance.

This webinar will show you how the loans to participators rules work generally, but more importantly how they apply in the context of specific scenarios that are more complex but commonplace - and how to prepare for them in advance.

What You Will Learn

This short webinar will cover the following:

• What is a close company? Does it catch non-UK companies, companies controlled by close companies and/or connected companies?
• Who is a participator? Does it catch connected persons, trustees/trust beneficiaries, LLP members, people that become participators after the loan is made and/or non-resident participators?
• What constitutes a loan? Does it include indirect loans and bed and breakfasting arrangements?
• What are the exceptions?
• How do the anti-avoidance rules apply - especially in the context of loans from group companies?
• What if the loan is written off?
• Where the participator is also a director/employee, do NICs apply and/or employment taxes apply as well as, or instead of, the loans to participator charge?

This webinar was recorded on 19th June 2023

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