(1)Where a person pays in any year of assessment—
(a)annual interest chargeable to tax under Case III of Schedule D; or
(b)interest payable in the United Kingdom or the Republic of Ireland on an advance from a bank carrying on a bona fide banking business in the United Kingdom or the Republic of Ireland or from a person bona fide carrying on a business as a member of the Stock Exchange or bona fide carrying on the business of a discount house in the United Kingdom or the Republic of Ireland;
and the interest is stated in sections 354 to 365 to be eligible for relief under this section, then, if he makes a claim to the relief and subject to the following provisions of this section, sections 354 to 368 and section 237(5)(b), the amount of the interest shall be deducted from or set off against his income for that year of assessment, and income tax shall be discharged or repaid accordingly.
(2)This section does not apply to a payment of relevant loan interest to which section 369 applies.
(3)Relief under this section shall not be given in respect of—
(a)interest on a debt incurred by overdrawing an account or by debiting the account of any person as the holder of a credit card or under similar arrangements; or
(b)where interest is paid at a rate in excess of a reasonable commercial rate, so much of the interest as represents the excess.