# Finance Act 1995, Paragraph 5

Extent: E+W+S+N.I.

(1) This paragraph applies where, in the case of a trade or profession carried on by any person in partnership with other persons—
(a) paragraph 52 of Schedule 2 to ITTOIA 2005 applies with or without the modification made by paragraph 3(2) above;
(b) a claim is made under section 383 of the Income Tax Act 2007 (relief for interest payments) in respect of interest on a loan to defray money contributed or advanced by him (“the partner”) to the partnership; and
(c) sub-paragraph (2) below applies to any of the money so contributed or advanced.
(2) This sub-paragraph applies to money so contributed or advanced unless it was contributed or advanced wholly or mainly—
(a) for bona fide commercial reasons; or
(b) for a purpose other than the reduction of the partnership’s borrowings for a relevant period.
(3) Subject to sub-paragraph (4) below, paragraph 52 of Schedule 2 to ITTOIA 2005 shall have effect as if the reference to the transitional overlap profit were a reference to the difference between that profit and the amount of interest paid by the partner in respect of the transitional overlap period on money to which sub-paragraph (2) above applies.
(4) Sub-paragraph (3) above does not apply where—
(a) the loan was made before 1st April 1994; or
(b) the aggregate amount of interest paid as mentioned in that sub-paragraph is less than such amount as may be prescribed by regulations made by the Board.
(5) In this paragraph—
“relevant period” means a period the whole or part of which falls within the transitional overlap period;
“the transitional overlap period” has the same meaning as in paragraph 3 above;
“the transitional overlap profit” means the amount mentioned in paragraph 52(2) of Schedule 2 to ITTOIA 2005 (whether having effect with or without the modification made by paragraph 3(2) above).

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Source: https://www.legislation.gov.uk/ukpga/1995/4/schedule/22/paragraph/5 (the official version)
Page: https://openlegislation.uk/finance-act-1995/schedule-22/paragraph-5
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.