(1) Section 438A of the Principal Act is amended by -

(a) substituting the following for subsection (1):

"(1) In this section -

'loan' includes advance;

'relevant arrangement' means any arrangement, the main purpose, or one of the main purposes, of which is to avoid or reduce a charge to tax under section 438.",

and

(b) inserting the following after subsection (3):

"(3A) Where a participator, or an associate of a participator, in a close company is party to any relevant arrangement, as a result of which a loan is made to a participator, or an associate of a participator, which, apart from this section, does not give rise to a charge under subsection (1) of section 438, that section shall apply as if the loan had been made by the close company to such participator, or such associate of a participator, as the case may be.".

(2) Subsection (1) shall apply to a relevant arrangement that is entered into on or after 18 October 2018.