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UK2.10 Expanding a UK business

Commentary

UK2.10.1 Tax reliefs for borrowing costs to expand a UK business | United Kingdom

United Kingdom

There are a number of ways that finance can be raised to fund the expansion of a UK business:

  1. Ìý

    •ÌýÌýÌýÌý via borrowing—in which case it is important that the person borrowing the funds obtains UK tax relief for interest paid, see UK2.10.1

  2. Ìý

    •ÌýÌýÌýÌý via a risk finance investment scheme—available to companies only, in which investors subscribe for new ordinary shares and the investor receives UK tax relief on their investment, see UK2.10.2

UK2.10.1ÌýÌýÌýÌý Tax reliefs for borrowing costs to expand a UK business

The UK tax relief available for interest paid on borrowing taken out to expand a UK business depends on whether or not the business is incorporated.

Where the business is unincorporated, the individual is the person who borrows the money and the conditions for UK income tax relief need to be considered.

Where the business is operated by a company, the money may be borrowed by an individual (eg a shareholder director) or by the company, in which case the loan relationship

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Web page updated on 28 Aug 2024 12:24