HC Deb 24 November 1967 vol 754 cc447-8W
Mr. Barnett

asked the Chancellor of the Exchequer if he will clarify the

It is not the practice to publish prompt details of central bank transactions.

criteria used by the Inland Revenue in administering Section 169 of the Income Tax Act, 1952, in particular as to whether interest paid by a borrower must he under deduction of tax; and if he will make a statement setting out the position in the case of different types of loans over short, medium and long term.

Mr. Harold Lever

Under Section 169 of the Income Tax Act, 1952 a person who pays yearly interest out of income charged to Income Tax has to pay standard rate tax on an equivalent amount of income; he is entitled to deduct standard rate tax when he pays the interest, and the recipient must allow the deduction. The question whether interest falls within Section 169 depends on the facts of the particular case; but, in general, interest is yearly interest if it is paid on a loan other than a short loan made for less than a year and not intended to be continued beyond a year.