Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Cost of a loan

19 February 2008
Issue: 4154 / Categories: Forum & Feedback
The benefit of a loan from an overseas company

My client purchased the equivalent of UK ordinary shares in his non-UK resident employing company. The purchase was funded by a loan from the employer bearing interest at the rate of 2% per annum.

The overseas company would be within the definition of 'close' if it was a UK resident company.

Are Taxation readers aware of any concession whereby relief is available for the interest paid under ITA 2007 s 392?

In addition are readers aware of any concession whereby the beneficial loans provision will not bite (the UK 'official rate' definitely applies)?

I should be most grateful for readers' thoughts on the chances of eligibility for tax relief in this case.

Query 17 159 — Closely Interested.

Reply from Exile

When looking through ITA 2007 s 392 there seem to be no restrictions on whether the close company has to be resident or whether the...

If you or your firm subscribes to, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or '' for further assistance.

back to top icon