Income Tax Act 2007 section 94

Carry back of certain interest as loss

Section 94 allows individuals who cannot fully use interest relief against their income in the current tax year to treat the unused amount as a trade loss for terminal trade loss relief purposes.

• Applies where interest paid in a tax year qualifies for relief under the rules for loans to buy partnership plant or machinery, or loans to invest in a partnership
• The interest must be an expense incurred wholly and exclusively for a trade carried on wholly or partly in the United Kingdom
• Where there is no income or insufficient income in the tax year to absorb the interest relief, the unused amount may be treated as a trade loss at the date of payment
• The same treatment applies equally to professions and vocations as it does to trades