Company charge to Income Tax on loans to participators
Revenue’s close company guidance has been updated to include some anti-avoidance provisions along with changes made by Finance Act 2018 to section 438A TCA 1997.
Section 438A TCA 1997 is an anti-avoidance provision which extends the scope of the close company provisions to charge income tax under section 438 TCA 1997 on loans made by a company which is controlled by, or which subsequently comes under the control of, a close company, where such loans would otherwise not give rise to a charge under section 438.
Finance Act 2018 inserted a new provision into section 438A TCA 1997 to ensure that certain tax avoidance arrangements, not currently caught by the provisions, will fall within the scope of the section 438 charge.