SAIM10220 - Relief for interest paid: interest in a close company: 바카라 사이트˜eligibility requirements바카라 사이트™
Eligibility for interest relief on loans to buy interest in a close company
ITA07/S393 sets out the following two conditions for relief:
- when the interest is paid the company must not be a close investment holding company, and
- both the 바카라 사이트˜capital recovery condition바카라 사이트™ (SAIM10250) and either the 바카라 사이트˜full time working condition바카라 사이트™ (SAIM10230) or the 바카라 사이트˜material interest condition바카라 사이트™ (SAIM10240) must be met.
The company must therefore have been a close company for tax purposes throughout the period beginning immediately after the application of the money and ending with the payment of interest giving rise to the claim for relief.
SP3/78 provides that relief should not be refused in a case where, after the application of any loan, the company ceases to be close, provided that all the other conditions for relief, including those referred to in SAIM10250, are satisfied.
Close investment holding companies
CTM60700 onwards has guidance on close investment holding companies.
No relief under ITA07/S392 is due unless at the time the ordinary share capital is acquired and when the interest is paid the company exists wholly or mainly for one of the purposes listed at (a) - (f) of CTM60710. A company will exist wholly or mainly for a particular purpose if at the requisite time that 바카라 사이트˜purpose바카라 사이트™ is the end or ultimate object of the company (see the case of Lord v Tustain (65TC761)). As regards companies which commence liquidation, see CTM60780.