489 / 822
GAZETTE
DECEMBER 1988
8 Ha r d s h ip
The Revenue indicated that their
general approach to the imple-
men t a t i on of the terms for
borrowings up to 30 November
1985 will be reasonable, taking
into account all the circum-
stances. Hardship cases will be
looked at by reference to the date
of the borrowing and the purpose
for which used.
9 Gene r al
The acountants mentioned they
were anxious to reach a workable
arrangement on Section 36.
However, it had to be understood
that individual taxpayers would
have come to their own decision
on whether the new rules should
be challenged through the appeal
procedures.
Technical Department
November 26, 1987
Append ix
Pa r t ne r sh i ps: relief in r espect
of i n t e r est Se c t i on 3 6 ,
F i nance Ac t 1 9 74
B o r r ow i n gs up t o 3 0
No v embe r, 1 9 85
(a ) It must be clear that relief for
the interest on these borrow-
ings cannot be obtained under
any other provision, e.g. under
Section 81, ITA 1967.
( b ) Except in the case of loans in
excess of £10,000, the pur-
pose for which the borrowings
were obtained need not be
indicated but all loans must be
identified to the Inspector and
a s t a t ement s how i ng the
principal outstanding at 30
November 1985 and the bal-
ance of the repayment period
remaining must be furnished.
( c ) There must be no departure
from or variation in the terms on
which the original loan was made
( d ) The Inspector will retain the
right to view any case where
it is considered that the con-
cessional relief has been abused.
B o r r ow i n gs a f t er 3 0 No v ember
1 9 85
( e ) Borrowings after this date
mu st
c omp ly
w i t h
t he
requirements of Section 36,
Finance Act 1974.
( f ) The proceeds of the borrow-
ings must be introduced into
the partnership either by way
of loan or contribution of capital.
( g ) The money must be used
wholly and exclusively for the
purposes of the partnership's
trade or profession, and
( h ) Any recovery of capital from
the partnership must be used
to repay the loan, if relief is not
to be restricted.
In determining whether the con-
ditions at (e) and (f) are met, the
Inspector will have regard to the
following:-
( i ) The loan(s) must be identified
(amount, lender and term)
(i i) It must be clear that the pro-
ceeds have been introduced
into the partnership business
and used for business pur-
poses only.
( i i i ) A loan(s) to finance drawings,
directly or indirectly, will be
regarded as used for the pur-
poses of the partnership's
trade or profession.
No t e
In deciding whether there is a
recovery of capital as envisaged at
(h), any undrawn profits at the end
of an accounting period will not be
regarded as forming part of the
capital of the partnership unless
they remain undrawn for a period
of more than t wo years from the
end of the accounting period.
•
N I X DO RF
are p l eased t o a n n o u n ce
t he l aunch of t he
Senior Partner So l i c i t o rs
Compu t er Sys t em
w h i c h w i ll be on d i sp l ay
at t he So l i c i t o rs and Legal
O f f i ce Exh i b i t i on at S t and
No. 9, J u r ys Ho t el
on 1 5 - 16 No v emb e r,
1 9 8 8
For further
details
contact:
DA V I D ROSS I,
Tel. 7 6 7 5 51
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249