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Beneficial Loans (Interest Rate)

Volume 32: debated on Wednesday 24 November 1982

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asked the Chancellor of the Exchequer if he will amend the Income Tax (Official Rate of Interest on Beneficial Loans) Order 1982 with effect from 1 December 1982 so that the official rate of interest is reduced from 12 to 10 per cent.

The "official rate", which was reduced from 15 to 12 per cent. on 6 October 1982, is based broadly upon the rate of interest which a credit-worthy borrower would ordinarily have to pay on a bank overdraft. There are no immediate plans to reduce it further, but it will be kept under review in the light of future changes in interest rates.