Finance Act 1995

Valid from 01/05/1995

42 Abolition of interest relief for commercially let property. U.K.

(1) In section 355 of the Taxes Act 1988, paragraph (b) of subsection (1)(relief for property that is commercially let) shall cease to have effect.

(2) That Act shall be further amended as follows—

(a) in section 353(1B), in the words after paragraph (b), for “sections 237(5)(b) and 355(4)” there shall be substituted “ section 237(5)(b) ”;

(b) in section 355, for the words “subsection (1)(a) above”, wherever occurring, there shall be substituted “ subsection (1) above ”;

(c) in sections 356(1) and 356B(5), for “355(1)(a)” there shall be substituted “ 355(1) ”;

(d) in sections 357A(7) and 357B(1)(c) and (6), for the words from “and is such” onwards there shall be substituted “ by virtue of section 354 ”; and

(e) in section 357C—

(i) in subsection (1)(e), for the words from “and would have been” onwards, and

(ii) in subsection (2), for the words from “and was such” onwards,

there shall, in each case, be substituted “ by virtue of section 354 ”.

(3) Subject to subsections (4) to (6) below, this section shall have effect in relation to any payment of interest made on or after 6th April 1995.

(4) Where—

(a) the profits or gains of any source of income that ceases in the course of the year 1995-96 are taxed, by virtue of section 39(5) or 41(9) above, without reference to the Schedule A that has effect by virtue of section 39(1) above, and

(b) that source of income includes any land, caravan or house-boat with respect to which the condition specified in section 355(1)(b) of the Taxes Act 1988 would be satisfied in the case of any loan,

this section shall not apply to any payment of interest on that loan which is made before the time in the year 1995-96 when that source of income ceases.

(5) Subject to paragraph 19(3) of Schedule 6 to this Act, no relief in respect of any payment of interest before 6th April 1995 shall be given under section 355(4) of the Taxes Act 1988 (income against which relief available) against any income for the year 1995-96 or any subsequent year of assessment except in a case where the income falls within subsection (4)(a) above.

(6) Schedule 7 to this Act (which makes amendments in relation to corporation tax which are consequential on this section) shall have effect in relation to accounting periods ending after 31st March 1995.