BIM45670 - Specific deductions: interest: only part of the payment satisfies the wholly and exclusively test

Where part of the payment of interest is wholly and exclusively laid out for the purposes of the business then that part is allowable as a deduction. An example of this is interest on a loan to buy a car that is used partly for business and partly for private purposes. A reasonable apportionment of the interest should be made based on the extent of business use of the asset.

Up to 1999/2000 there were special rules for interest paid on the purchase of the main residence which was partly used for business. These are explained at BIM45745 onwards.