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419Loans and advances to persons who die

(1)    This section applies if—

(a)    a loan or advance is made to a person who dies,

(b)    a company is or has been assessed or is liable to be assessed under section 419 of ICTA (loans to participators in close companies etc) in respect of the loan or advance, and

(c)    after the death the company releases or writes off the whole or part of the debt in respect of the loan or advance.

(2)    Tax is not charged under this Chapter if at the time of the release or writing off the debt is due from the person's personal representatives in that capacity, but see—

(a)    section 664 (under which the amount that would be so charged is treated as part of the aggregate income of the estate for the purposes of Chapter 6 of Part 5), and

(b)    section 701(8) of ICTA (under which similar provision is made for the purposes of Part 16 of ICTA).

(3)    If subsection (2) does not apply, tax is charged under this Chapter on the person from whom the debt is due at the time of release or writing off.

NOTES
Initial Commencement
Specified date

This Act comes into force on 6 April 2005 and has effect, for the purposes of income tax for the year 2005–06 and subsequent tax years, and for the purposes of corporation tax for accounting periods ending after 5 April 2005: see s 883; for transitional provisions and savings see Sch 2 hereto.
Exempt Income91 Income Tax Allowances, Deductions & Reliefs95 Trusts & Trustees95 Company Law & Business Entities91 Personal Taxes91 Savings & Investment Income91 Equity & Trusts95 Companies & Corporate Bodies91 Income Tax91 Trading Income93 Tax Law91

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