Commentary on Sections Overview Overview Section 399: Eligibility requirements for interest on loans within section 398
1121.This section sets out two conditions relating to circumstances during the period of the loan, both of which must be met. It is based on section 362 of ICTA and, in relation to film partnerships, on section 75(1) of FA 2006.
1122.Condition A is that the individual to whom the loan is made must be a partner in the partnership throughout the period from the making of the investment to the payment of the interest. Relief is not available if the partnership is an investment LLP or a limited partnership in which the individual is a limited partner.
1123.Where the special rules for film partnerships in section 400 apply, subsection (4) provides that relief is restricted to 40% of the interest that would otherwise be eligible for relief.
1124.Subsection (5) provides that certain senior employees of the partnership may count as partners for the purposes of this section, enacting Statement of Practice SP A33. See Change 70 in Annex 1.