Section 459 — Corporation Tax Act 2010: Loan treated as made to participator

Loan treated as made to participator 459 1 This section applies if under arrangements made by a person (P)—

a a close company makes a loan or advance which, apart from this section, does not give rise to a charge to tax under section 455, and b a person other than the close company makes a payment or transfers property to, or releases or satisfies (in whole or in part) a liability of, a relevant person who is a participator in the company or an associate of such a participator.

2 Sections 455 to 458 and apply as if the loan or advance had been made to the relevant person. 464ZA and 464ZB 3 But this section does not apply if—

a the arrangements mentioned in subsection (1) are made by P in the ordinary course of a business carried on by P, or b the total income of the relevant person includes, in respect of the matter mentioned in subsection (1)(b), an amount not less than the loan or advance.

4 If a company (C) controls another company (D), a participator in C is to be treated for the purposes of this section as being also a participator in D.