Corporation Tax Act, 1976

Relief from corporation tax on interest on certain loans.

177.—(1) Where, for purposes of corporation tax, the income of a company for an accounting period includes interest payable on or after the 6th day of April, 1976, in respect of a permanent loan the company shall be entitled, on due claim, to have its liability to corporation tax for the accounting period reduced as provided by subsection (3).

(2) For the purposes of this section “permanent loan” means a loan of a permanent character made under an agreement entered into before the 27th day of November, 1975, and which under the agreement is—

(a) secured by mortgage or debenture or otherwise on the assets or income of a company, and

(b) if subject to repayment is subject to repayment at not less than three months' notice:

Provided that a loan shall not be regarded as a permanent loan for the purposes of this section if under the terms of the loan agreement the rate of interest or other conditions of the loan could be altered during the currency of the loan.

(3) The reduction referred to in subsection (1) shall be determined in accordance with section 184 (3), apart from the proviso, as if the interest were a relevant deficiency within the meaning of subsection (1) of that section.

(4) Where, in computing the reduction provided for by subsection (3), the appropriate amount as determined in accordance with section 184 (3) (a) (ii), is the company's income for the accounting period the excess of such interest as is mentioned in subsection (1) for the accounting period over that income shall, for the purposes of this section, be aggregated with the amount of any such interest for the next succeeding accounting period and relief shall be allowed for the said period in respect of the aggregated amount; and if that aggregated amount exceeds the income for the said period the excess shall be carried forward to the accounting period next succeeding the said period and so on.

(5) A claim under this section shall be made to the inspector within two years from the end of the accounting period.