Finance Act 1998

24 (1) Section 419 of the Taxes Act 1988 (loans to participators etc) shall be amended as follows.

(2) In subsection (1) (charge at rate of ACT) for the words from “such proportion” onwards there shall be substituted “25 per cent. of the amount of the loan or advance”.

(3) In subsection (4) (relief in case of repayment of loan or advance)—

(a) after “subsection (1) above and” there shall be inserted “(a)”;

(b) after “is repaid to the company,” there shall be inserted “or

(b) the whole or part of the debt in respect of the loan or advance is released or written off,”; and

(c) after “the repayment is made” there shall be inserted “or the release or writing off occurs”.

(4) In subsection (4A) (provision in relation to relief under subsection (4))—

(a) after “Where” there shall be inserted “(a)”;

(b) after “that loan or advance,” there shall be inserted “or

(b) the release or writing off of the whole or any part of the debt in respect of a loan or advance occurs on or after the day on which tax by virtue of this section becomes due in relation to that loan or advance,”; and

(c) after “repayment”, in the second and third places where it occurs, there shall be inserted “, release or writing off”.

(5) Sub-paragraph (2) above has effect in relation to loans or advances made on or after 6th April 1999.

(6) Sub-paragraphs (3) and (4) above have effect in relation to the release or writing off of the whole or part of a debt on or after 6th April 1999.