Directors loans: beware changes to section 455 rules

11 May 2016

A move to curb the use of shareholder and directors' loans under section 455 of CTA 2010 will raise the tax liability for directors, warns Cathy Corns, corporate tax partner at Mercer & Hole. Find out how the changes will hit company owners with a selection of worked examples

By way of background, there are specific anti-avoidance rules in Corporation Tax Act 2010 (CTA 2010) at sections 455 et seq where a close company (broadly one that is controlled by no more than five shareholders or alternatively is controlled by shareholders who are directors) makes a loan to a shareholder or an associate of the shareholder.

The company has to pay to HMRC a tax deposit based on the quantum of the loan, payable nine months after the end of the accounting period in which the loan was made.

Your free features:

Breaking news and expert analysis
Customisable daily newsletters
Six free CPD learning modules each year
Personalised CPD tracker
Top 75 Firms league tables
Regulatory changes
Hardman’s Tax Data

Tax | When is a director’s loan written off for tax purposes?

Finance | Legal updates: defective request to view register of members under section 117

Finance | Legal updates: unfair prejudice petitions not subject to statutory time limits

Tax | HMRC to clamp down on director’s loan accounts

Tax | Personal tax changes from 6 April 2026

Navigate

Tax Services

Your free features:

Sign up to Business & Accountancy Daily