Loans to participators

When a close-company loan can create a section 455 charge, its rate, payment date, and important branches.

Section 455 has company and borrower conditions

Reviewed · Current · Law · From 1 April 2010

The core charge applies when a close company makes a loan or advance to a relevant person who is a participator or an associate of one.

A director is not necessarily a participator. Section 455 also contains trustee and partnership cases, and sections 456 onward contain exceptions and extensions.

Exceptions and branches

Ordinary money-lending business, qualifying charitable-trust loans, and the tightly conditioned section 456 employee/director exception require separate facts.

Section 455 payment date

Reviewed · Current · Law · From 1 April 2010

9 months and 1 day

The charge is due on the day after nine months have ended from the end of the accounting period in which the loan was made.

This is commonly described as nine months and one day after that accounting-period end. It is distinct from the date that selects the percentage.

Exceptions and branches

A qualifying repayment before the charge falls due can create immediate section 458 relief.

Section 455 rate from 6 April 2026

Reviewed · Current · Law · From 6 April 2026

35.75%

For a loan made from 6 April 2026, the section 455 rate is 35.75%.

CTA 2010 section 455 follows the dividend upper rate for the loan's tax year. Finance Act 2026 raised that upper rate to 35.75%, and CTM61505 reflects the change.

Assumptions

The loan is within section 455 after applying its exceptions.

Authority conflict

Director's loans — The general GOV.UK directors’ loan guide retrieved on 10 September 2026 still states 33.75% for post-6-April-2022 loans, while 35.75% is required for loans made from 6 April 2026 by controlling law and confirmed by the updated HMRC manual.

The £15,000 employee exception is conditional

Reviewed · Current · Law · Current reviewed treatment; earlier start date not yet established

£15,000

The section 456 employee or director exception requires aggregate qualifying loans not exceeding £15,000, full-time work, and no material interest.

It is not a general section 455 threshold for owner-directors. Acquiring a material interest while the loan remains outstanding can create a deemed loan at that time.

Section 455 rate from 6 April 2022 to 5 April 2026

Reviewed · Historic · Law · 6 April 2022 to 5 April 2026

33.75%

For a loan made from 6 April 2022 through 5 April 2026, the section 455 rate is 33.75%.

The statute follows the dividend upper rate for the tax year in which the loan or advance was made, not the accounting-period end or payment date.

Assumptions

The loan is within section 455 after applying its exceptions.

A qualifying £10,000 loan made on 5 April 2026 uses 33.75%, producing an exact £3,375 section 455 charge. The same amount first advanced on 6 April 2026 uses 35.75%, producing £3,575. The accounting-period end—not either percentage—sets the payment date.

What changed

5 April 2026: For a loan made from 6 April 2022 through 5 April 2026, the section 455 rate is 33.75%.

Linked from

Sources

Corporation Tax Act 2010, Chapter 3 — Section 455(1) to (3). Primary authority.
Corporation Tax Act 2010, Chapter 3 — Section 455(3). Primary authority.
CTM61610 — CTA 2010 section 458: date relief is due. Official guidance.
Income Tax Act 2007, dividend rates — Sections 8 and 13A. Primary authority.
Finance Act 2026 — Section 4(1) and (2). Primary authority.
CTM61505 — Rate of section 455 tax. Official guidance.
Corporation Tax Act 2010, Chapter 3 — Section 456(3) to (8). Primary authority.
Corporation Tax Act 2010, Chapter 3 — Sections 455 to 458. Primary authority.
Finance Act 2022 — Section 4(1) and (3). Primary authority.

How sources are ranked

Knowledge version: sterling-knowledge@2026-09-11.7. Last checked 11 September 2026.