Finance Act, 1993

Amendment of provisions relating to relief in respect of interest.

5.—(1) In this section “the principal sections” means sections 76 (1) and 496 of, and paragraph 1 (2) of Part III of Schedule 6 to, the Income Tax Act, 1967 .

(2) Section 496 of the Income Tax Act, 1967 , is hereby amended, as respects the year 1993-94 and subsequent years of assessment, by the substitution of the following subsection for subsection (2A) (inserted by the Finance Act, 1980 ):

“(2A) In relation to any interest paid in respect of any period beginning on or after the 6th day of April, 1993, and notwithstanding the provisions of subsection (1), no repayment of tax shall be made under this section for any year of assessment—

(a) in the case of a person who is assessed to tax for the year of assessment in accordance with the provisions of section 194, on the excess of the interest over £5,000,

(b) in the case of a widowed person, on the excess of the interest over £3,600, or

(c) in any other case, on the excess of the interest over £2,500.”.

(3) Section 7 of the Finance Act, 1989 , shall not apply or have effect in relation to any interest paid in respect of any period beginning on or after the 6th day of April, 1993, and ending on or before the 5th day of April, 1994.

(4) As respects the year of assessment 1993-94 and subsequent years of assessment, section 6 of the Finance Act, 1987 , shall not apply or have effect for the first three years of assessment for which relief falls to be given under the principal sections in respect of one or more than one qualifying loan (within the meaning of section 21 of the Finance Act, 1982 ):

Provided that for the purposes of calculating the additional relief, if any, which but for the enactment of this subsection would not have been given for a year of assessment, any relief given in accordance with the principal sections in the case of a person who has elected or could be deemed to have duly elected to be assessed to tax in accordance with the provisions of section 194 of the Income Tax Act, 1967 , for any year of assessment shall, notwithstanding any other provision of the Tax Acts, be treated as given equally to the person and that person's spouse for such year of assessment notwithstanding that—

(a) section 197 of the Income Tax Act, 1967 , may have applied for that year of assessment, and

(b) the payments in respect of which relief is given may not have been made in such proportions.

(5) In relation to any interest paid in respect of any period beginning on or after the 6th day of April, 1993, relief which falls to be granted under the principal sections shall, notwithstanding the foregoing provisions of this section, be reduced—

(a) in the case of a person who is assessed to tax for the year of assessment in accordance with the provisions of section 194 of the Income Tax Act, 1967 , by £200 or, if less, the amount of interest paid, or

(b) in any other case, by £100 or, if less, the amount of interest paid.