Section 385: General provisions about loans
1063.This section brings together some general rules which apply to the loan itself. It is based on sections 359, 360, 361, 362, 364 and 367 of ICTA.
1064.With the exception of section 367 of ICTA, the source legislation provides a condition in each of the rules that the loan must be to defray money applied for a particular purpose. The rewritten provisions simply refer to a loan being “used”.
1065.Subsection (1) expands on what “used” is to be taken to mean. In particular, with the exception of a loan to pay inheritance tax, it covers the case of expenditure already incurred.
1066.The restrictions in subsections (2) and (3) do not apply to loans to buy plant or machinery (sections 388 and 390 of this Act).