Corporation Tax Act 2010 section 456

Exceptions to the charge under section 455

Section 456 sets out the circumstances in which the section 455 tax charge on loans or advances made by a close company to its participators does not apply.

• Loans made in the ordinary course of business by a company whose business includes money lending are exempt from the section 455 charge.
• Trade debts arising from the supply of goods or services are exempt, provided credit terms do not exceed six months or the company's normal credit period for customers.
• Loans or advances to trustees of charitable trusts are exempt, provided the funds are applied solely for the charitable trust's purposes.
• Small loans (up to £15,000 in total from the company and its associates) to full-time working directors or employees who do not hold a material interest in the company are also exempt.