BIM45770 - Specific deductions: interest: to be treated as a trading loss: ICTA88/S390

Where interest eligible for relief under ICTA88/S353 is money wholly and exclusively laid out or expended for the purposes of a trade profession or vocation

Where the income of a year of assessment is insufficient to cover certain interest, the amount unallowed may be:

• carried-forward as if it were a loss carried forward under ICTA88/S385,

or

• treated for the purposes of ICTA88/S388 (terminal loss relief) as a loss sustained at the date of payment.

The section applies to interest which would have been allowable as a business expense if it were not allowable under ICTA88/S353 (relief in respect of interest, see RE300 onwards). Cases of difficulty should be referred to CT&VAT (Technical).

These provisions do not apply to interest paid abroad under deduction of tax, see BIM45775.