Rate of tax charged on loans to participators will increase. 

From 6 April 2016 the rate of tax charged on loans to participators (currently 25%) will increase to 32.5%. 

The current law is contained in section 455 and section 464A of Corporation Tax Act 2010. 

The new rates will apply to loans made and benefits conferred by close companies on or after 6 April 2016. 

There is an unclear statement which says that for ‘accounting periods which straddle 6 April 2016 different rates will be applied to separate loans made or benefits conferred before, and on or after, 6 April 2016’.