CTM60110 | Close companies: tests: participator - extended meaning of
From HM Revenue & Customs · Company Taxation Manual
and (2) (formerly ICTA88/S418 (8)), and S459 (4) (formerly ICTA88/S419 (7))
The definition of a ‘participator’ is extended, so that a participator in a company which controls (see onwards) another company is to be treated as being also a participator in that other company, for the following purposes:
For the purposes of ICTA88/S418 (extended meaning of distributions for close companies, see onwards) in determining what are distributions.
For the purposes of (formerly ICTA88/S419) (loans to participators, etc, see onwards) as respects any loan or advance.
If, for example, Company B holds all the issued share capital of Company T and Company T makes a loan to W, a shareholder in Company B, that loan is within (formerly ICTA88/S419) since W as well as being a participator in Company B is deemed also to be a participator in Company T.