Commentary

E1.827A Qualifying loan interest—loan to buy an interest in an employee-controlled company

Personal and employment tax

E1.827A Qualifying loan interest—loan to buy an interest in an employee-controlled company

E1.827A Qualifying loan interest—loan to buy an interest in an employee-controlled company

Introduction

The commentary below discusses the income tax relief available for interest paid by to acquire an interest in an employee-controlled company. 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.

Loan to buy an interest in an employee-controlled company

Where the necessary conditions are satisfied, income tax relief can be claimed for interest on a loan taken out by an individual to acquire shares in an employee-controlled company1.

Meaning of employee-controlled company

A company is an employee-controlled company if at least 50% of the issued ordinary share capital and voting power are beneficially owned by full-time

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