Income Tax (Trading and Other Income) Act 2005 section 58

Incidental costs of obtaining finance

Section 58 allows a deduction for certain incidental costs incurred in obtaining finance for a trade, including costs of unsuccessful attempts to raise finance.

• Costs such as fees, commissions, advertising and printing incurred wholly and exclusively to obtain, secure or repay a loan or loan stock are deductible, provided the interest on that finance is itself deductible in calculating trading profits.
• Even if the finance is not ultimately obtained, the costs of trying to secure it or arrange security for it still qualify for deduction.
• Foreign exchange losses or hedging costs, premiums or discounts on repayment of loans or loan stock, and stamp duty are all specifically excluded from the definition of incidental costs.
• Additional restrictions apply where the loan or loan stock is convertible, as set out in section 59 of the Act.