Part 8Other reliefs
Chapter 1Interest payments
The relief: introduction
383Relief for interest payments
(1)
A person who pays interest in a tax year is entitled to relief for the tax year for the interest if—
(a)
the loan on which the interest is payable is a loan to which a provision specified in subsection (2) applies,
(b)
the interest is eligible for relief in accordance with this Chapter, and
(c)
the person makes a claim.
(2)
The provisions are—
(a)
section 388 (loan to buy plant or machinery for partnership use),
(b)
section 390 (loan to buy plant or machinery for employment use),
(c)
section 392 (loan to buy interest in close company F1etc),
(d)
section 396 (loan to buy interest in employee-controlled company),
(e)
section 398 (loan to invest in partnership),
(f)
section 401 (loan to invest in co-operative), and
(g)
section 403 (loan to pay inheritance tax).
(3)
The amount of the relief given under subsection (1) is equal to the amount of the interest eligible for relief.
(4)
The relief is given by deducting that amount in calculating the person's net income for the tax year in which the interest is paid (see Step 2 of the calculation in section 23).
(5)
This section is subject to—
(a)
section 384 (general restrictions on relief under this Chapter),
F2(aa)
section 384B (restriction on relief where cash basis applies),
(b)
section 385 (general provisions about loans),
(c)
section 386 (loans partly meeting requirements),
(d)
section 387 (exclusion of double relief etc), and
(e)
section 405 (carry back and forward of relief for interest on loans within section 403).