Commentary on Sections Overview Overview Section 398: Loan to invest in partnership
1118.This section deals with conditions for relief for interest on a loan to invest in a partnership. It is based on section 362(1) of ICTA.
1119.This section deals with the conditions relating to ways of investing in the partnership. Section 399 deals with the conditions that relate to circumstances at the time the interest is paid.
1120.Subsection (2) provides that the loan qualifies for relief if the proceeds are used in either buying a share in a partnership or contributing or advancing money to a partnership that is used for a trade or profession carried on by the partnership. As explained in the commentary on section 388, no reference is made to “vocation” as a partnership cannot carry on a vocation. As with section 392, relief is available for a loan replacing one that met the conditions in this section.