Taxes Consolidation Act 1997 section 250A

Restriction of relief to individuals in respect of loans applied in acquiring interest in companies

Section 250A restricts the availability of interest relief under section 248 (or that section as extended by section 250) where a loan to an individual is used, directly or indirectly, in connection with the acquisition of certain buildings that qualify for capital allowances.

• Interest relief on a loan used to invest in a company is restricted where the company uses the money (after 1 January 2003) to acquire, or to replace money or pay off a loan used to acquire, an interest in a building that qualifies for capital allowances
• The restriction also applies where the individual uses borrowed money (on or after 20 February 2004) to acquire shares in a company where at least 75% of that company's income is rental income from one or more specified buildings
• Where the restriction applies, the amount of interest relief that may be claimed for a year of assessment is limited to the individual's return from the company in that year — that is, the distributions (before dividend withholding tax) or interest received by the individual from the company as a result of the investment
• Where only part of a loan is affected by the restriction, an apportionment is made on a proportionate basis to determine the amount of interest eligible for relief and the amount of the individual's return