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Company was not a loan relationship debtor and no loan was made to a participator

By Mark McLaughlin, October 2021

The appellant company was not a debtor under a loan relationship in respect of payments made to another company and it had not made a loan to a participator. 

Summary 

The appellant company was not a debtor under a loan relationship in respect of payments made to another company and it had not made a loan to a participator (within CTA 2010, s 455). 

Background 

The appellant company (‘WTB’) owned and farmed land. WTB had a director and a major shareholder (‘SB’). Between 2014 and 2016, WTB made a series of payments to or for the benefit of another company (‘SEP’) in which SB had a 50% shareholding. 

SEP was struck off the Companies House register in June 2016. In its tax return for the year ended 30 June 2016, WTB recognised a deduction under the loan relationship provisions from its taxable profits as the result of making a bad

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