Finance Act, 1980

Amendment of provisions relating to relief in respect of interest.

7.—(1) Section 496 of the Income Tax Act, 1967 , is hereby amended—

(a) by the insertion of the following subsection after subsection (2):

“(2A) In relation to any interest paid in respect of any period beginning on or after the 6th day of April, 1980, 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 husband, 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 £4,800,

(b) in the case of a widowed person, on the excess of the interest over £3,500, or

(c) in any other case, on the excess of the interest over £2,400.”;

(b) by the insertion after subsection (3) of the following subsection:

“(3A) Where, in relation to interest paid in respect of any period beginning on or after the 6th day of April, 1980, relief is claimed by a person by virtue of more than one of the following provisions, that is to say, this section, section 76 (1) (c) and paragraph 1 (2) of Part III of Schedule 6, relief shall not be given to such person in respect of the part (if any) of the aggregate amount of interest paid by him that exceeds the appropriate amount specified in subsection (2A) in relation to the year of assessment 1980-81 and subsequent years of assessment.”:

and

(c) in subsection (4), by the substitution for “subsection (2)” of “subsections (2) and (2A)”.

(2) In relation to annual interest in respect of any period beginning on or after the 6th day of April, 1980, neither section 76 (1) (c) of the Income Tax Act, 1967 , nor paragraph 1 (2) of Part III of Schedule 6 to that Act shall apply for any year of assessment—

(a) in the case of a husband assessed to tax for that year of assessment in accordance with the provisions of section 194 of the Income Tax Act, 1967 , to the excess of the interest over the amount specified in paragraph (a) of section 496 (2A) of that Act,

(b) in the case of a widowed person, to the excess of the interest over the amount specified in paragraph (b) of the said section 496 (2A), or

(c) in any other case, to the excess of the interest over the amount specified in paragraph (c) of the said section 496 (2A).

(3) (a) Section 38 of the Finance Act, 1974 , is hereby amended—

(i) by the substitution for subsection (1) of the following subsection:

“(1) In relation to connected persons, the reference in section 496 of the Income Tax Act, 1967 , and sections 44 and 52 to any sum shall, in the case of each such person, be taken to be a reference to the proportion of that sum which the interest paid by that person bears to the aggregate of the interest paid by all the connected persons.”

and

(ii) by the substitution in subsection (2) for “1968” of the following:

“1968:

Provided that in a case where a husband and wife are assessed to income tax for a year of assessment in accordance with the provisions of section 193 of the Income Tax Act, 1967 , they shall not, for that year of assessment, be connected persons for the purposes of this subsection.”.

(b) Section 9 of the Finance Act, 1979 , shall have effect for the year 1980-81 and subsequent years of assessment as if paragraph (b) in the Table were deleted.

(4) Section 10 of the Finance Act, 1979 , is hereby amended, as respects the year 1980-81 and subsequent years of assessment, by the substitution in subsection (2) of the following definition for the definition of “A”:

“A is—

(i) in the case of a husband who is assessed to tax in accordance with the provisions of section 194 of the Income Tax, 1967, £4,800,

(ii) in the case of a widowed person, £3,500, or

(iii) in any other case, £2,400.”.