Relief for interest on acquisition of trade, partnership share or trading company: tax form help

Claiming relief

You can claim the interest as a deduction if you have taken out a loan to acquire a:

trade
a share in a partnership which carries on a trade or profession
a controlling interest (more than 50% of the issued share capital) in a trading company

If any part of the loan was used for another purpose you must only claim the proportion that relates to the qualifying portion.

Loan to acquire less than a controlling interest in a trading company concession

Recovering capital

If you recover any capital from the trade, partnership or company and don’t use that amount to repay the loan, you must restrict the amount of your claim.

Example

Capital taken out of the business calculation
Loan capital	£500,000
Interest paid	£25,000
Capital taken out of the business 1st July	£100,000
In the year that the capital taken out, the interest paid would be restricted as follows
100,000 / 500,000 × 25,000 =	£5,000
5,000 × 6/12 =	£2,500
Claim £25,000 - £2,500 =	£22,500
If no further capital is recovered the following year the claim would be: £25,000 - £5,000 = £20,000