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20 Relief For Interest (Dependent Relative's Residence)

Volume 130: debated on Monday 21 March 1988

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Resolved,

That—
  • (1) In sections 355(1)(a) and 357(2)(a) of the Income and Corporation Taxes Act 1988 the words "or of a dependent relative or former or separated spouse of his." shall not have effect in relation to payments of interest made on or after 6th April 1988.
  • (2) Paragraph (1) above shall not apply where the interest is paid on a loan made before 6th April 1988 if interest paid on it at a relevant time was eligible for relief under section 353 of that Act only because the land, caravan or house-boat concerned was used as the only or main residence of the same dependent relative or former or separated spouse.
  • (3) In paragraph (2) above "relevant time" means—
  • (a) the last time when interest was paid on the loan before 6th April 1988, or
  • (b) if no interest was paid on it before that date, any time within the period of 12 months (or any longer period substituted in relation to the case under section 355(2) of that Act) after the date on which the loan was made;
  • but sub-paragraph (b) above shall not apply if at any time after the date on which the loan was made and before the date on which the land, caravan or house-boat was first used as mentioned in paragraph (2) above, the land, caravan or house-boat was used for any other purpose.
  • (4) In section 358(4)(a) of that Act (relief where borrower deceased) the words "or of any dependent relative of the deceased" shall not have effect in relation to payments of interest made on or after 6th April 1988 unless—
  • (a) the deceased died before that date, and
  • (b) the land, caravan or house-boat was used as the only or main residence of the dependent relative before that date.
  • (5) Where it is proved by written evidence that a loan made on or after 6th April 1988 was made in pursuance of an offer made by the lender before that date and that the offer either was in writing or was evidenced by a note or memorandum made by the lender before that date, the loan shall be deemed for the purposes of this Resolution to have been made before that date.
  • (6) Interest paid by a housing association shall not be relevant loan interest for the purposes of Part IX of that Act where by virtue of this Resolution it would not be relevant loan interest if paid by a member of the association; and in this paragraph "housing association" means a housing association for the time being approved for the purposes of section 488 of that Act or a self-build society for the time being approved for the purposes of section 489.
  • And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Mr. Lawson.]