Eligibility for carrying forward losses on film partnership loan.
My client has paid interest in year one on a loan to invest in a film partnership. The arrangement is a qualifying loan within ITA 2007 s 383 since it is used to invest in a partnership (s 398).
In a later year his accountant put him into another film partnership and the losses were carried back to year one. However the losses are so large that they cover almost the entirety of his taxable income before the deduction of the loan interest.
It has been put to me that insofar as there is an excess of loan interest relief it can be carried forward and used in succeeding years under ITA 2007 s 88.
The year in question precedes the later rules capping interest relief.
Although the conditions of sub-s 88(1)(a) have been satisfied I am mystified by sub-s 88(1)(b). The requirement...
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