# Corporation Tax Act 2009, Section 375: Loans to close companies by participators etc

Extent: E+W+S+N.I.

(1) The case to which this section applies is where—
(a) there is a time in the actual accrual period when the close company conditions are met, and
(b) neither the CIS-based close company conditions nor the CIS limited partnership conditions are met
and, where subsection (4A) applies, the non-qualifying territory condition is met.
(2) The close company conditions are that—
(a) the company which has the debtor relationship (“D”) is a close company, and
(b) a person (“C”) standing in the position of creditor as respects the loan relationship is—
(i) a participator in D,
(ii) the associate of a person who is participator in D,
(iii) a company of which a participator in D has control,
(iv) a company in which a participator in D has a major interest,
(v) a person who controls a company which is a participator in D,
(vi) the associate of a person within sub-paragraph (v), or
(vii) a company controlled by a person within sub-paragraph (v).
(3) The CIS-based close company conditions are that—
(a) D is a CIS-based close company at all times when the close company conditions are met,
(b) C is not resident for tax purposes in a non-qualifying territory at any such time, and
(c) D is a small or medium-sized enterprise for the actual accrual period.
(4) The CIS limited partnership conditions are that—
(a) the debt is one which is owed to, or to persons acting for, a CIS limited partnership,
(b) no member of that partnership is resident for tax purposes in a non-qualifying territory at any time in the actual accrual period,
(c) D has received written notice from the partnership containing information from which it appears that the condition in paragraph (b) is met, and
(d) D is a small or medium-sized enterprise for the actual accrual period.
(4A) This subsection applies if C is a company; and the non-qualifying territory condition is that C is—
(a) resident for tax purposes in a non-qualifying territory at any time in the actual accrual period, or
(b) effectively managed in a non-taxing non-qualifying territory at any such time.
(5) Section 376 applies for the interpretation of this section.

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Source: https://www.legislation.gov.uk/ukpga/2009/4/section/375 (the official version)
Page: https://openlegislation.uk/corporation-tax-act-2009/section-375
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.