SolvedCTM61545 | Close companies: loans to participators: material interest
From HM Revenue & Customs · Company Taxation Manual
A person can have a material interest through control of share capital or entitlement to a portion of the company’s assets on its winding up.
A person has a material interest in a company if he, either on his own or with one or more associates, or if any associate of his with or without any such associates -
is/are the beneficial owner(s) of, or able directly or through the medium of other companies or by any other indirect means to control, more than 5% of the ordinary share capital.
Ordinary share capital means all the issued share capital, however described, of the company, other than share capital carrying a right to a dividend only at a fixed rate and no other right to share in the company’s profits.
possesses, or is entitled to acquire, such rights that would in the event of the winding up of the company or any other circumstances, give an entitlement to receive more than 5% of the assets which would then be available for distribution among the participators.