Income Tax (Trading and Other Income) Act 2005 section 52

Exclusion of double relief for interest

Section 52 prevents a taxpayer from claiming tax relief twice on the same interest payment — once as a deduction in calculating trading profits and again under the separate relief available under section 383 of ITA 2007.

• Interest on a debt for which relief has been claimed under section 383 of ITA 2007 cannot also be deducted when calculating trading profits
• The restriction extends to all other interest on the same debt or liability for any relevant tax year — that is, any year in which the interest could otherwise have been included in the trading profits calculation
• All interest payable on money advanced on current account is treated as interest on the same debt, regardless of how many accounts are involved or whether different banks or lenders provided the funds
• Relief under section 383 of ITA 2007 is only treated as given once the claim can no longer be varied, whether on appeal or otherwise, and a corresponding rule in section 387 of ITA 2007 prevents a section 383 claim where interest has already been deducted in the trading profits computation