Interest relief - anti-avoidance measures
The measure
An individual will be denied a deduction for interest payments on loans used to invest in partnerships or small companies as part of an arrangement through which the tax deductibility of the interest means that the investor is guaranteed to make a profit.
Who will be affected?
Individuals exploiting the interest relief rules. The measure is not intended to affect genuine commercial investments in businesses where there is uncertainty as to the return that will be produced from the arrangements.
When?
The measures will apply to interest payments made on or after 19 March 2009.
Our view
This is one of a number of anti-avoidance measures, aimed at preventing tax relief where individuals have entered into artificial or aggressive tax avoidance schemes.
