# Income and Corporation Taxes Act 1988, Paragraph 5

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

(1) No deduction is allowed in respect of payments of interest or other financing costs by the permanent establishment to any other part of the non-resident company, except as provided by sub-paragraph (2).
(2) The restriction in sub-paragraph (1) above does not apply to interest or other costs of financing that are payable in respect of borrowing by the permanent establishment in the ordinary course of a financial business carried on by it.
(3) In sub-paragraph (2) “financial business” means any of the following—
(a) banking, deposit-taking, money-lending or debt-factoring, or a business similar to any of those;
(b) dealing in commodity or financial futures.

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Source: https://www.legislation.gov.uk/ukpga/1988/1/schedule/A1/paragraph/5 (the official version)
Page: https://openlegislation.uk/income-and-corporation-taxes-act-1988/schedule-A1/paragraph-5
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.