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SOLR_PROP

Finance Act, 1983

Amendment of provisions relating to restriction of relief for interest.

25.(1) Section 21 of the Finance Act, 1982 , is hereby amended by the substitution of the following subsection for subsection (3)—

“(3) (a) Notwithstanding the provisions of subsection (2), the principal sections shall apply—

(i) in relation to a loan or loans made after the operative date but on or before the 9th day of February, 1983, to interest paid or payable on such loan or loans on or before the 5th day of April, 1985, and

(ii) in relation to a loan or loans made after the 9th day of February, 1983, to interest paid or payable on such loan or loans on or before the 5th day of April, 1983,

to the extent that the amount of the loan or the aggregate amount of the loans on which such interest is paid or payable in a year of assessment does not exceed the specified limit for the year of assessment and, if the said amount or the said aggregate amount on which interest is paid or payable on the loan or loans exceeds the specified limit for the year of assessment, the principal sections shall apply only to so much of that interest as bears to the whole of that interest the same proportion as that part of the said amount or the said aggregate amount which does not exceed the specified limit bears to the whole of the said amount or the said aggregate amount.

(b) In this subsection ‘specified limit’, in relation to a year of assessment, means—

(i) in the case of a husband who is assessed to tax for the year of assessment in accordance with the provisions of section 194 of the Income Tax Act, 1967 , £5,000,

(ii) in the case of a widowed person, £3,600, or

(iii) in any other case, £2,500.”.

(2) Section 23 of the Finance Act, 1982 , is hereby amended by the substitution of the following subsection for subsection (3)—

“(3) In relation to—

(a) relevant interest paid on or before the 5th day of April, 1985, on all loans made after the operative date but on or before the 9th day of February, 1983,

(b) relevant interest paid on or before the 5th day of April, 1983, on all loans made after the 9th day of February, 1983,

(c) interest—

(i) paid on or after the 6th day of April, 1983, on all loans made after the 9th day of February, 1983,

(ii) paid on or after the 6th day of April, 1985, on all loans whenever made,

(iii) paid after the operative date on an overdraft which was not in existence on that date,

(iv) paid on or after the 6th day of April, 1983, on an overdraft which was in existence on the operative date, and

(d) interest on an overdraft referred to in paragraph (c) (iv) where that interest is paid in the year ending on the 5th day of April, 1983, in so far as the amount of the interest exceeds the amount of the interest which would have been payable for that year on the amount of the overdraft on the operative date at the rate at which interest on that amount was chargeable on the operative date,

section 10 of the Corporation Tax Act, 1976 , shall have effect as if the following subsection were substituted for subsection (6)—

(6) Subject to subsection (7), interest shall not be treated as a charge on income.’.”.