Corporation Tax Act 2009 section 1301A

Restriction of deductions for interest

Section 1301A restricts how companies may claim tax deductions for interest expenses, ensuring that all such deductions are channelled through a single set of rules.

• When calculating a company's income from any source for corporation tax, interest can only be deducted under the loan relationships rules in Part 5 of the Act.
• No other route exists for deducting interest expenses against corporation tax profits.
• This applies regardless of the source of income against which the interest might otherwise be set.
• The effect is to centralise the tax treatment of all corporate interest within the loan relationships framework.