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Finance Act 1977

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This is the original version (as it was originally enacted).

36Interest relief for those in job-related living accommodation

(1)In Part II of Schedule 1 to the Finance Act 1974 (conditions of allowance of interest relief on loans for purchase or improvement of land), after paragraph 4 there shall be inserted—

4A(1)Part I of Schedule 9 to the Finance Act 1972 shall nevertheless apply where the property concerned (that is, the land, caravan or house boat referred to in that Part)—

(a)is, at the time the interest is paid, used by the borrower as a residence or, if it is paid less than twelve months after the date on which the loan is made, is so used by him within twelve months after that date ; or

(b)is intended at that time to be used in due course as his only or main residence ;

and at that time he resides in living accommodation which is for him job-related.

(2)In the case of a borrower for whom there are two or more properties falling within sub-paragraph (1) above, he may not by virtue of this paragraph claim relief for any period under section 75 of the Finance Act 1972 in respect of more than one of them.

(3)Subject to sub-paragraph (4) below, living accommodation is job-related for a person if it is provided for him by reason of his employment, or for his spouse by reason of hers, in any of the following cases—

(a)where it is necessary for the proper performance of the duties of the employment that the employee should reside in that accommodation ;

(b)where the accommodation is provided for the better performance of the duties of the employment, and it is one of the kinds of employment in the case of which it is customary for employers to provide living accommodation for employees ;

(c)where, there being a special threat to the employee's security, special security arrangements are in force and the employee resides in the accommodation as part of those arrangements.

(4)The living accommodation is not job-related, except in a case where sub-paragraph (3)(c) above applies, if it is provided by a company and the employee is a director of the company or an associated company, unless the conditions of sub-paragraph (5) below are satisfied.

(5)Those conditions are that—

(a)the company of which the employee is a director is one in which he or she has no material interest; and

(b)either the employment is as a full-time working director or the company is non-profit-making (meaning that neither does it carry on a trade, nor do its functions consist wholly or mainly in the holding of investments or other property) or is established for charitable purposes only.

(6)For the purposes of this paragraph—

(a)a company is an associated company of another if one of them has control of the other or both are under the control of the same person; and

(b)the following interpretative provisions of section 72 of the Finance Act 1976, that is to say, subsection (2) ("employment"), subsections (8) to (10) " director ", " full-time working director" and "material interest") and subsection (11) ("control ", in relation to body corporate) apply as if this paragraph were included in sections 60 to 71 of that Act.

(7)Only interest paid on or after 6th April 1977 is eligible for relief by virtue of this paragraph..

(2)In consequence of subsection (1) above, other provisions of Part II of Schedule 1 to the Finance Act 1974 shall be amended as shown in Part II of Schedule 8 to this Act.

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