CheckLists.Tax (beta)
K4. Paying/incurring interest
INCOME TAX
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Transactions in securities
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- Payment of interest probably not a transaction in securities
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- Laird Group plc v. IRC: "I would at least pause before attaching such a description to the payment of interest on a debt merely because it was secured by a debenture or unsecured loan note" (§29).
Legislation:
Cases: Laird Group plc v. IRC [2003] UKHL 54;
HMRC manuals:
Commentary:
See also:
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Settlements legislation
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- Borrower from trust paying excessive interest may become settlor
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- If the arrangement involves bounty.
Legislation:
Cases:
HMRC manuals:
Commentary:
See also:
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Loan to invest in partnership​
Interest on loan taken out to invest in partnership is not a partnership expense
"[50] Putting this another way, I agree with Mr Rivett’s distinction between expenses which a partner incurs in its capacity as an investor in a partnership and expenses which that partner incurs in pursuing the trading purposes of that partnership. Expenses falling within the second category are the ones to which Lord Justice Henderson was referring in his judgment in Vaines. In my view, his judgment has no relevance to expenses falling within the first category." (Shiner v. HMRC [2020] UKFTT 295 (TC), Judge Beare)
Legislation:
Cases: Vaines v. HMRC [2018] EWCA Civ 45;
HMRC manuals:
Commentary:
See also:
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