CTM61710 | Close companies: loans to participators: companies controlled by a close company
From HM Revenue & Customs · Company Taxation Manual
makes sure that a loan made by a company (whether a close company or not) which is controlled by a close company, is chargeable under . It does not operate where applies (see ).
A loan by a company controlled by a close company to a participator in the controlling company is normally chargeable directly under . This will be the case if the lending company is close because the definition of ‘participator’ in includes participators in the controlling company.
, however, does not by itself charge a loan made by a company which is not close (for example because it is non-resident).
So, for example, a non-resident subsidiary company may be set up or acquired and loans made to participators in the parent company. A loan out of money subscribed for share capital or out of existing funds of that subsidiary to a participator of the close company is brought within by .