Income and Corporation Taxes Act 1988

787 Restriction of relief for payments of interest. U.K.

M1 (1) Relief shall not be given to any person under any provision of the Tax Acts in respect of any payment of interest if a scheme has been effected or arrangements have been made (whether before or after the time when the payment is made) such that the sole or main benefit that might be expected to accrue to that person from the transaction under which the interest is paid was the obtaining of a reduction in tax liability by means of any such relief.

(2) In this section “relief” means relief by way of deduction in computing profits or gains or deduction or set off against income or total profits.

(3) Where the relief is claimed by virtue of [F1 section 83(2)(b) of the Finance Act 1996 (claim to treat non-trading deficit as eligible for group relief)] any question under this section as to what benefit might be expected to accrue from the transaction in question shall be determined by reference to the claimant company and the surrendering company taken together.

Textual Amendments

F1 Words in s. 787(3) substituted (with effect in accordance with s. 38(2)(3) of the amending Act) by Finance Act 1998 (c. 36), Sch. 5 para. 44 (with Sch. 5 para. 73)

Marginal Citations

M1 Source—1976 s.38