Paragraph 3

Section 375 (late interest: loans to close companies by participators etc) is amended as follows.

In subsection (1), insert at the end (not as part of paragraph (b))— “ and, where subsection (4A) applies, the non-qualifying territory condition is met. ”

In subsections (3)(b) and (4)(b), after “resident” insert “ for tax purposes ”.

After subsection (4) insert—

“(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.”