Income Tax (Trading and Other Income) Act 2005

Interest payments

52 Exclusion of double relief for interest

(1) In calculating the profits of a trade, no deduction is allowed—

(a) for any tax year for the interest paid on a debt or liability in respect of which relief is given under section 353 of ICTA (see subsection (5) below), or

(b) for any relevant tax year for other interest on the same debt or liability.

(2) A tax year is a relevant one if the interest in respect of which the relief is given could, but for the relief, have been brought into account in calculating the profits of a trade of the tax year.

(3) For the purposes of subsection (1)(b) all interest which—

(a) is capable of being brought into account in calculating the profits of a trade, and

(b) is payable by any person on money advanced to the person on current account,

is treated as interest on the same debt.

(4) It does not matter if the money is advanced—

(a) on one or more accounts, or

(b) by the same or separate banks or other persons.

(5) For the purposes of this section relief under section 353 of ICTA is to be treated as given only when the claim for the relief can no longer be varied (whether on appeal or otherwise).

(6) For a rule excluding relief under section 353 of ICTA if interest on a debt or liability is brought into account in calculating the profits of a trade, see section 368(3) of ICTA.