HC Deb 25 March 1991 vol 188 cc716-8

Resolved,

That—

(1) At the end of section 353 of the Income and Corporation Taxes Acts 1988 there shall be added— (4) In computing for the purposes of excess liability the total income of a person for any year of assessment, no deduction shall be allowed in respect of any amount of interest which falls to be deducted or set off under subsection (1) above by virtue of section 355(1)(a), 356(1) or 365.

(5) In subsection (4) above, "excess liability" means the excess of liability to income tax over what it would be if all income tax were charged at the basic rate, to the exclusion of any higher rate."

(2) In section 369 of that Act, in subsection (3), after the words "in computing his total income" there shall be inserted the words "(otherwise than for the purposes of excessliability)"; and after that subsection there shall be inserted— (3A) In computing for the purposes of excess liability the total income of a person for any year of assessment, no deduction shall be allowed in respect of any amount of relevant loan interest to which this section applies. (3B) In this section "excess liability" means the excess of liability to income tax over what it would be if all income tax were charged at the basic rate, to the exclusion of any higher rate.

(3) The amendment made by paragraph (1) above shall not apply in relation to interest which falls to be deducted or set off under section 353(1) of that Act by virtue of paragraph (a) of subsection (5) of section 354 of that Act in any case where—

  1. (a) the loan on which the interest is payable is the loan referred to in that paragraph as "the first-mentioned loan"; and
  2. (b) the loan referred to in paragraph (b) of that subsection as "the other loan" was made before 6th April 1991.

(4) the amendments made by paragraph (2) above shall not apply in relation to an amount of interest which is relevant loan interest (within the meaning of section 369 of that Act) by virtue of section 371 of that Act in any case where—

  1. (a) the loan on which the interest is payable is the loan referred to in subsection (1) of that section as "the first loan"; and
  2. (b) the loan which is, for the purposes of that subsection, "the other loan" was made before 6th April 1991.

(5) Where the loan mentioned in sub-paragraph (b) of paragraph (3) above or, as the case may be, of paragraph (4) above was made on or after 6th April 1991, it shall be treated for the purposes of the paragraph in question as made before that date if it is proved by written evidence—

PART I
TABLES OF FLAT RATE CASH EQUIVALENTS
TABLE A
Cars with an original market value up to £19,250 and having a cylinder capacity
Cylinder capacity of car in cubic centimetres Age of car at end of relevant year of assessment
Under 4 years £2,050 4 years or more £1,400
1400 or less … … … … … … … … … £2,050 £1,400
More than 1400 but not more than 2000 … … … £2,650 £1,800
More than 2000 … … … … … … … … £4,250 £2,850
TABLE B
Cars with an original market value up to £19,250 and not having a cylinder capacity
Original market value of car Age of car at end of relevant year of assessment
Under 4 years £2,050 4 years or more £1,400
Less than £6,000 … … … … … … … … £2,050 £1,400
£6,000 or more but less than £8,500 … … … … £2,650 £1,800
£8,500 or more but not more than £19,250 … … … £4,250 £2,850

(a) that the loan was made in pursuance of an offer made before that date and that the offer either was in writing or was evidenced by a note or memorandum made by the lender before that date, and

(b) that the loan was used to defray money applied in pursuance of a binding contract entered into before that date

(6) Paragraphs (1) to (5) above shall have effect in relation to payments of interest made on or after 6th of April 1991 (whenever falling due).

(7) This Resolution shall not require any change to be made in the amounts deductible or repayable under section 203 of the Income and Corporation Taxes Act 1988 before 18th May 1991.

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.