BIM45650 - Specific deductions: interest: contents

This chapter applies for income tax purposes to the computation of trading profits and property income. It does not apply for CT purposes, where there are separate rules in the loan relationships legislation (CTM50000). From 6 April 2005 payments of profit share returns and alternative finance returns are treated for tax purposes as interest.

BIM45665Must be paid wholly and exclusively for business purposes
BIM45670Only part of the payment satisfies the wholly and exclusively test
BIM45675Separate loan for specific asset or purpose
BIM45680Change in use of funds or asset
BIM45685Security for the funds
BIM45690Funding the business
BIM45695General business accounts, mixed use accounts and offset accounts
BIM45700Withdrawal of capital from a business
BIM45705Overdrawn capital account
BIM45710Overdrawn capital account: no adjustment for revaluations
BIM45715Overdrawn capital account: adjustments for depreciation and losses
BIM45720Overdrawn capital account: herd basis
BIM45725Silk v Fletcher, Special Commissioner’s decision
BIM45730Overdrawn capital account: example
BIM45735Partner's capital
BIM45740On unpaid tax
BIM45745Mortgage interest relief: mixed use of premises
BIM45750Examples
BIM45755Properties occupied rent free
BIM45760Capital employed in the business
BIM45765Exclusion of double relief
BIM45770To be treated as a trading loss
BIM45775Annual interest payable abroad
BIM45776Gross interest paid abroad: conditions for relief
BIM45780Alternative finance arrangements: overview and commencement date
BIM45781Alternative finance arrangements: tax treatment
BIM45782Alternative finance arrangements: transfer pricing

The interest on some loans for specific purposes is allowable under specific provisions and must comply with that legislation, see RE420 onwards.