PART IX ANNUAL PAYMENTS AND INTEREST

Relief for payments of interest (excluding MIRAS)

362 Loan to buy into partnership.

1

M1Subject to sections 363 to 365, interest is eligible for relief under section 353 if it is interest on a loan to an individual to defray money applied—

a

in purchasing a share in a partnership; or

b

in contributing money to a partnership by way of capital or premium, or in advancing money to a partnership, where the money contributed or advanced is used wholly for the purposes of the trade, profession or vocation carried on by the partnership; or

c

in paying off another loan interest on which would have been eligible for relief under that section had the loan not been paid off (on the assumption, if the loan was free of interest, that it carried interest);

and the conditions stated in subsection (2) below are satisfied.

C12

M2The conditions referred to in subsection (1) above are—

a

that, throughout the period from the application of the proceeds of the loan until the interest was paid, the individual has been a member of the partnership F1 otherwise than—

i

as a limited partner in a limited partnership registered under the Limited Partnerships Act 1907, or

ii

as a member of an investment LLP; and

b

that he shows that in that period he has not recovered any capital from the partnership, apart from any amount taken into account under section 363(1).