§ 113. Mr. PETOasked the Chancellor of the Exchequer whether he will issue instructions to the Board of Inland Revenue to withdraw their rule requiring that a loan must be in continuous existence for a period of one whole year before repayment of Income Tax on the amount of bank interest is allowed?
§ Mr. LLOYD GEORGEI am not prepared to authorise repayment where the loan has not been in continuous existence for a year. If the loan is for business purposes, the interest is allowed as an expense in arriving at the liability to assessment. If it is for private purposes, the interest is private expenditure, and to repay Income Tax upon it would be to differentiate without valid reason between it and other forms of such expenditure.