178Exception for loans where interest qualifies for tax reliefU.K.
A loan is not a taxable cheap loan in relation to a particular tax year if, assuming interest is paid on the loan for that year (whether or not it is in fact paid), the whole of that interest—
(a)is eligible for relief under section 353 of ICTA (general provision for relief for payments of interest, excluding MIRAS),
(b)would be eligible for relief under that section but for the fact that it is a payment of relevant loan interest to which section 369 of ICTA applies (mortgage interest payable under deduction of tax),
(c)is deductible in computing the amount of the profits to be charged [F1to tax] in respect of a trade, profession or vocation carried on [F2wholly or partly in the United Kingdom] by the person to whom the loan is made, or
(d)is deductible in computing the amount of the profits to be charged [F3to tax in respect of a UK property business, or a Schedule A business,] carried on by that person.
Textual Amendments
F1Words in s. 178(c) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 587(a)(i) (with Sch. 2)
F2Words in s. 178(c) inserted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 587(a)(ii) (with Sch. 2)
F3Words in s. 178(d) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 587(b) (with Sch. 2)