SCHEDULES

SCHEDULE 4 U.K.Cash basis for small businesses

PART 2 U.K.Consequential amendments

ITA 2007 U.K.

F1 54 U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1 Sch. 4 para. 54 omitted (with effect for the tax year 2024-25 and subsequent tax years) by virtue of Finance Act 2024 (c. 3), Sch. 10 paras. 46(b), 47 (with Sch. 10 paras. 48-50)

55 (1) Chapter 1 of Part 8 of ITA 2007 (relief for interest payments) is amended as follows. U.K.

(2) In section 383(5), after paragraph (a) insert—

“(aa) section 384B (restriction on relief where cash basis applies),”.

(3) After section 384A insert—

“384B Restriction on relief where cash basis applies

(1) Relief is not to be given under this Chapter for a tax year for interest paid by a person on a relevant loan if the partnership to which the loan relates has made an election under section 25A of ITTOIA 2005 (cash basis for small businesses) for the tax year.

(2) A loan is a “relevant loan” if—

(a) it is a loan to which section 388 applies (loan to buy plant or machinery for partnership use), or

(b) it is a loan to which section 398 applies (loan to invest in partnership) and which is not used for purchasing a share in a partnership.”