ANNEX 1:: MINOR CHANGES IN THE LAW MADE BY THE BILL This change is adverse to some taxpayers and favourable to others in principle. But it is expected to have no practical effect as it is in line with current practice. Change 67: Interest relief: exclusion of double relief: finality: section 387
This change makes clear when the amount of interest allowed as a business expense is finally determined for the purposes of rewriting section 368(3) of ICTA. It corresponds to Change 12 in Annex 1 to the Explanatory Notes accompanying ITTOIA in relation to the rewrite of section 368(4) of ICTA.
Section 353 of ICTA provides for interest to be claimed as a relief. In limited circumstances that relief may also qualify as a deduction in calculating the profits of a trade or property business. Section 368(3) of ICTA provides that relief is not given under section 353 of ICTA if a deduction for the interest has been taken into account as a business expense.
Section 368(3) of ICTA is subject to section 368(6) of ICTA. Section 368(6) provides that references to an amount taken into account are references to an amount taken into account in an assessment that has been finally determined.
The term “finally determined” does not fit well with Self Assessment. Section 387(7) makes clear that it means when the interest allowed as a deduction in an assessment can no longer be varied.