Paragraph 9
United Kingdom
Where for any year—
no interest is paid on a loan, but
had interest been paid on it at the official rate part of that interest would have been eligible for relief,
then the calculation of the cash equivalent under Part II of this Schedule shall be modified as provided by paragraph 8(a) or (b) above with the substitution for the references to the amounts of interest paid or not eligible for relief of references to the amounts (ascertained in accordance with the following provisions of this paragraph) which would have been paid or would not have been eligible for relief.
For the purposes of paragraph 8(a) above as applied by this paragraph, the whole amount of interest at the official rate which would have been paid for any year shall be taken to be the amount payable for that year calculated in accordance with paragraph 4 above (disregarding paragraph 8); and the amount of that interest which would not have been eligible for relief shall be ascertained—
by finding that amount on the assumption that the amount referred to in paragraph 4(a)(i) was the amount outstanding for the whole year;
by finding that amount on the assumption that the amount referred to in paragraph 4(a)(ii) was the amount outstanding for the whole year; and
by adding together the resulting figures and dividing by 2.
For the purposes of paragraph 8(b) above as applied by this paragraph, the amount of interest which would have been paid and the amount of it which would not have been eligible for relief shall be ascertained on the assumption that interest at the official rate was paid daily throughout the year on the maximum amount outstanding on each day.
Notes on Schedule 7
Textual amendments
- F1
Schs. 6, 6A, 7, 7A repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 paras. 110, 111, Sch 8 Pt. 1 (with Sch. 7)
Notes on Part III
Textual amendments
- F1
Sch. 7 Pts. 3-5 repealed (with effect in accordance with s. 88(5)(6) of the repealing Act) by Finance Act 1994 (c. 9), s. 88(4)(b), Sch. 26 Pt. 5(5), Note