Income Tax Act 2007 section 88

Carry forward of certain interest as loss

Section 88 deals with the treatment of qualifying interest payments as carry-forward trade losses when there is insufficient income in the tax year to absorb the relief.

• Interest paid on loans to buy plant or machinery for partnership use, or loans to invest in a partnership, may qualify for carry forward as a trade loss
• The interest must be incurred wholly and exclusively for the purposes of a trade carried on wholly or partly in the United Kingdom
• Carry forward applies only where there is no income, or insufficient income, in the tax year for the interest relief to be fully given
• The rules apply equally to professions and vocations as they do to trades

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