Cost of a loan

My client purchased the equivalent of UK ordinary shares in his non-UK resident employing company. The purchase was funded by a loan from the employer bearing interest at the rate of 2% per annum.

The overseas company would be within the definition of 'close' if it was a UK resident company.

Are Taxation readers aware of any concession whereby relief is available for the interest paid under ITA 2007 s 392?

In addition are readers aware of any concession whereby the beneficial loans provision will not bite (the UK 'official rate' definitely applies)?

I should be most grateful for readers' thoughts on the chances of eligibility for tax relief in this case.

Query 17 159 — Closely Interested.

Reply from Exile

When looking through ITA 2007 s 392 there seem to be no restrictions on whether the close company has to be resident or whether the...