Income Tax Act 2007 section 401

Loan to invest in co-operative

Section 401 sets out the conditions under which interest on a loan taken out by an individual to invest in a co-operative may qualify for tax relief.

• A loan qualifies if it is used to acquire shares in a co-operative, to lend money to a co-operative (or its subsidiary) for genuine business purposes, or to repay an earlier qualifying loan
• A co-operative means a common ownership enterprise or a co-operative enterprise as defined in the Industrial Common Ownership Act 1976
• Where the loan funds are on-lent to a co-operative or its subsidiary, they must be used wholly and exclusively for the business of that body
• There is no longer a requirement that the loan must have been made after 10 March 1981, so interest on any surviving earlier loans is now also eligible for relief