Budget 2009 - Restrictions on tax relief on interest paid
Currently interest paid by individuals on loans used to invest in certain companies or in partnerships may qualify for income tax relief.
However, HMRC believe that this relief is being exploited and so relief is being withdrawn where the loan and investment are part of an arrangement that eliminates any real commercial risk.
This may cause a problem for people who have invested in tax saving schemes in the past as the restriction applies to interest paid on or after 19 March 2009 irrespective of when the loan was taken out.
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Cathy Corns is a Corporate Tax Partner at Mercer & Hole.
Date: 22nd April, 2009
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