703.This section provides for the setting of the official rate of interest under section 178 of FA 1989 and allows special rates to be used for foreign currency loans. It derives from section 160(5) of ICTA.
704.Subsection (1) defines “the official rate of interest”.
705.Subsection (2) allows regulations made under section 178 of FA 1989 to specify a different official rate in the case of loans in another currency. “Normally lives” and “has lived at some time” are not defined in section 160(5) of ICTA. They therefore take their normal meaning. SE 26105 in the Inland Revenue Schedule E Manual provides guidance on this.
706.Subsection (3) provides that the power given under subsection (2) does not affect the general power under section 178 of FA 1989 to make different provisions.