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Introduction

The commentary below discusses the income tax relief available for interest paid by to acquire an interest in a partnership, including a limited liability partnership (LLP). This should be read in conjunction with E1.820, which includes details about general restrictions that apply to all qualifying loans and the mechanism by which relief is given (including where interest paid can be treated as a trading loss).

Loan to invest in a partnership

Use of the loan

Interest paid is eligible for income tax relief where the loan to an individual is used to¹:

1. Ìý

   (a)ÌýÌýÌýÌý purchase a share in a partnership (whether or not the share is purchased by buying out another partner or by contributing capital on admission as a partner²)

2. Ìý

   (b)ÌýÌýÌýÌý contribute money to a partnership as capital or a premium, or in making advances, where the money contributed or advanced is used wholly for the trade, profession or vocation, or

3. Ìý

   (c)ÌýÌýÌýÌý pay off another loan which qualifies for relief

Where