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Any s419?

Any s419?

...a loan is made by an employee controlled company, to an employee of the employee controlled company, to purchase shares in the employee controlled company.

Would this be an exempt qualifying loan for the purposes of a S419 benefit?

I think it would, and can not think of any other tax implications on the company or the employee (provided the conditions for relief for interest paid on this type of loan HMRC SAIM10270 have been met.

Does anybody agree?

Thank you.

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04th Feb 2013 11:07

What is...

... a S.419 benefit?

When you say that the company is an employee-controlled company, are you saying that it's not a close company?  If it is a close company, was the loan made before or after the employee acquired the shares.

From what you say, the loan would appear to meet the requirements of S.178 ITEPA 2003, so that no loan benefit will arise under S.175.

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By leafy
04th Feb 2013 12:49

Thank you GA.

Presumably the relevance of the before and after would be S420 loan to participators?

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04th Feb 2013 12:56

S.420

I think you mean S.455 CTA 2010 (which used to be S.419 ICTA 1988), but yes, I am indeed referring to a loan to a participator in a close company. If, indeed, it is a close company.

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