Tax on loans from an offshore company

Where loans are made to shareholders from a UK resident company, the main problem is the 'loans to participator' provisions. These apply so that the company that makes the loan has to pay a 25% tax charge to the Revenue (based on the amount outstanding at the year end). However what if the company is non resident? If an overseas company was non UK resident the loans to participator provisions should not apply (this is because they only apply to close companies and a non resident company is not a close company). However, if the company was UK resident the provisions could apply, and therefore it's essential to ascertain where the central managment and control was undertaken. On the assumption that it would not be UK resident, then no UK tax charge would arise to the company, however the shareholders position would need to be considered in relation to any beneficial loan. Income tax provisions subject a director or employee receiving a beneficial loan by reason of their employment as a benefit in kind. If they were UK resident and domiciled they would be taxed on emoluments (including benefits) from UK and overseas employments, and therefore potentially if the loan was interest free (or low interest) a UK income tax charge could arise. If the company was classed as a UK resident, any write off of the loan would usually be treated as a distribution by the company, and assessed on the shareholder as a dividend. If the company was not UK resident, the loan waiver could be taxed either as additional income from the employment or as a benefit on the assumption the loan was made by reason of an employment. If this applied it would then be taxed in the UK in the tax year of waiver.