Readers’ forum: Section 455 implications of loan

I have a nagging doubt in my mind somewhere that there is a CTA 2010 s 455 issue in the circumstances I describe below. I know that s 455 deals with loans to individuals but I vaguely remember being told a long time ago that it can also apply to loans between connected companies.

My client Mr A owns 51% of company X. The other 49% is owned by a number of small shareholders none of whom are connected or related to Mr A. Mr A also owned 50% of company Y. The other 50% is owned by Mr B. Mr A and Mr B are unrelated. There are no provisions in the articles dealing with what happens if company Y is deadlocked. Company X is proposing to lend (on commercial terms) £150 000 to company Y. Does a s 455 liability arise on the making of the...