Office of Public Sector Information
PART IX continued
(1) Subject to the following provisions of this section and sections 361 to 364, interest is eligible for relief under section 353 if it is interest on a loan to an individual to defray money applied—
(a) in acquiring any part of the ordinary share capital of a close company satisfying any of the conditions of section 424(4); or
(b) in lending money to such a close company which is used wholly and exclusively for the purposes of the business of the company or of any associated company of it which is a close company satisfying any of those conditions; or
(c) in paying off another loan interest on which would have been eligible for relief under section 353 had the loan not been paid off (on the assumption, if the loan was free of interest, that it carried interest);
and either the conditions stated in subsection (2) below or those stated in subsection (3) below are satisfied.
(2) The conditions first referred to in subsection (1) above are—
(a) that, when the interest is paid, the company continues to satisfy any of the conditions of section 424(4) and the individual has a material interest in the company; and
(b) that he shows that in the period from the application of the proceeds of the loan to the payment of the interest he has not recovered any capital from the company, apart from any amount taken into account under section 363(1); and
(c) that, if the company exists wholly or mainly for the purpose of holding investments or other property, no property held by the company is used as a residence by the individual;
but the condition in paragraph (c) above shall not apply in a case where the individual has worked for the greater part of his time in the actual management or conduct of the business of the company, or of an associated company of the company.
(3) The conditions secondly referred to in subsection (1) above are—
(a) that, when the interest is paid, the company continues to satisfy any of the conditions of section 424(4) and the individual holds any part of the ordinary share capital of the company; and
(b) that in the period from the application of the proceeds of the loan to the payment of the interest the individual has worked for the greater part of his time in the actual management or conduct of the company or of an associated company of the company; and
(c) that he shows in the period from the application of the proceeds of the loan to the payment of the interest he has not recovered any capital from the company, apart from any amount taken into account under section 363(1).
(4) In this section expressions to which a meaning is assigned by Part XI have that meaning, but—
(a) in relation to any loan made after 5th April 1987, paragraph 39 of Schedule 9 shall have effect for determining whether the interest on the loan is eligible for relief under section 353 by virtue of this section; and
(b) in relation to any loan made before 14th November 1986, section 417 shall have effect subject to the following modifications—
(i) in subsection (3)(c) for the words following “deceased person” there shall be substituted the words “subject to subsection (3A) below, any other person interested therein”; and
(ii) after subsection (3) there shall be added—
“(3A) Subsection (3)(c) above shall not apply so as to make an individual an associate as being entitled or eligible to benefit under a trust—
(a) if the trust relates exclusively to an exempt approved scheme as defined in section 592; or
(b) if the trust is exclusively for the benefit of the employees, or the employees and directors, of the company or their dependants (and not wholly or mainly for the benefit of directors or their relatives), and the individual in question is not (and could not as a result of the operation of the trust become), either on his own or with his relatives, the beneficial owner of more than 5 per cent. of the ordinary share capital of the company;
and in applying paragraph (b) above any charitable trusts which may arise on the failure or determination of other trusts shall be disregarded.”
(1) Subject to the following provisions of this section and sections 363 and 364, interest is eligible for relief under section 353 if it is interest on a loan to an individual to defray money applied—
(a) in acquiring a share or shares in a body which is a co-operative as defined by section 363(5); or
(b) in lending money to any such body which is used wholly and exclusively for the purposes of the business of that body or of a subsidiary of that body; or
(c) in paying off another loan interest on which would have been eligible for relief under section 353 had the loan not been paid off (on the assumption, if it was free of interest, that it carried interest);
and the conditions in subsection (2) below are satisfied.
(2) The conditions referred to in subsection (1) above are—
(a) that the loan was made after 10th March 1981;
(b) that, when the interest is paid, the body continues to be a co-operative; and
(c) that in the period from the application of the proceeds of the loan to the payment of the interest the individual has worked for the greater part of his time as an employee of the body or of a subsidiary of the body; and
(d) that he shows that in that period he has not recovered any capital from the body apart from any taken into account under section 363(1).
(3) Subject to sections 362 to 365, interest is eligible for relief under section 353 if it is interest on a loan to an individual to defray money applied—
(a) in acquiring any part of the ordinary share capital of an employee-controlled company; or
(b) in paying off another loan, interest on which would have been eligible for relief under section 353 had the loan not been paid off (on the assumption, if it was free of interest, that it carried interest);
and the conditions stated in subsection (4) below are satisfied.
(4) The conditions referred to in subsection (3) above are that—
(a) the company is, throughout the period beginning with the date on which the shares are acquired and ending with the date on which the interest is paid—
(i) an unquoted company resident in the United Kingdom and not resident elsewhere; and
(ii) a trading company or the holding company of a trading group;
(b) the shares are acquired before, or not later than 12 months after, the date on which the company first becomes an employee-controlled company;
(c) during the year of assessment in which the interest is paid the company either—
(i) first becomes an employee-controlled company; or
(ii) is such a company throughout a period of at least nine months;
(d) the individual or his spouse is a full-time employee of the company throughout the period beginning with the date on which the proceeds of the loan are applied and ending with the date on which the interest is paid or, if at that date he has ceased to be such an employee, ending with whichever is the later of—
(i) the date on which he ceased to be such an employee;
(ii) the date 12 months before the payment of the interest; and
(e) the individual shows that in the period from the application of the proceeds of the loan to the payment of the interest he has not recovered any capital from the company, apart from any amount taken into account under section 363(1).
(5) For the purposes of this section a company is employee-controlled at any time when more than 50 per cent.—
(a) of the issued ordinary share capital of the company, and
(b) of the voting power in the company,
is beneficially owned by persons who, or whose spouses, are full-time employees of the company.
(6) Where an individual owns beneficially, or he and his spouse together own beneficially, more than 10 per cent. of the issued ordinary share capital of, or voting power in, a company, the excess shall be treated for the purposes of subsection (5) above as being owned by an individual who is neither a full-time employee of the company nor the spouse of such an employee.
(7) Where an individual and his spouse are both full-time employees of the company, subsection (6) above shall apply in relation to them with the omission of the words “or he and his spouse together own beneficially”.
(8) In this section—
“full-time employee”, in relation to a company, means a person who works for the greater part of his time as an employee or director of the company or of a 51 per cent. subsidiary of the company;
“holding company” means a company whose business (disregarding any trade carried on by it) consists wholly or mainly of the holding of shares or securities of one or more companies which are its 75 per cent. subsidiaries;
“trading company” means a company whose business consists wholly or mainly of the carrying on of a trade or trades;
“trading group” means a group the business of whose members taken together consists wholly or mainly of the carrying on of a trade or trades, and for this purpose “group” means a company which has one or more 75 per cent. subsidiaries together with those subsidiaries; and
“unquoted company” means a company none of whose shares are listed in the Official List of the Stock Exchange.
(1) Subject to sections 363 to 365, interest is eligible for relief under section 353 if it is interest on a loan to an individual to defray money applied—
(a) in purchasing a share in a partnership; or
(b) in contributing money to a partnership by way of capital or premium, or in advancing money to a partnership, where the money contributed or advanced is used wholly for the purposes of the trade, profession or vocation carried on by the partnership; or
(c) in paying off another loan interest on which would have been eligible for relief under that section had the loan not been paid off (on the assumption, if the loan was free of interest, that it carried interest);
and the conditions stated in subsection (2) below are satisfied.
(2) The conditions referred to in subsection (1) above are—
(a) that, throughout the period from the application of the proceeds of the loan until the interest was paid, the individual has been a member of the partnership otherwise than as a limited partner; and
(b) that he shows that in that period he has not recovered any capital from the partnership, apart from any amount taken into account under section 363(1).
(1) If at any time after the application of the proceeds of the loan the individual has recovered any amount of capital from the close company, co-operative, employee-controlled company or partnership without using that amount in repayment of the loan, he shall be treated for the purposes of sections 353, 360, 361 and 362 as if he had at that time repaid that amount out of the loan, so that out of the interest otherwise eligible for relief (or, where section 367(4) applies, out of the proportion so eligible) and payable for any period after that time there shall be deducted an amount equal to interest on the amount of capital so recovered.
(2) The individual shall be treated as having recovered an amount of capital from the close company, co-operative, employee-controlled company or partnership if—
(a) he receives consideration of that amount or value for the sale, exchange or assignment of any part of the ordinary share capital of the company or of his share or shares in the co-operative or of his interest in the partnership, or of any consideration of that amount or value by way of repayment of any part of that ordinary share capital or of his share or shares in the co-operative; or
(b) the close company, co-operative, employee-controlled company or partnership repays that amount of a loan or advance from him or the partnership returns that amount of capital to him; or
(c) he receives consideration of that amount or value for assigning any debt due to him from the close company, co-operative, employee-controlled company or partnership;
and where a sale or assignment is not a bargain made at arm’s length, the sale or assignment shall be deemed to be for a consideration of an amount equal to the market value of what is disposed of.
(3) In the application of this section to Scotland for the word “assignment” wherever it occurs there shall be substituted the word “assignation”.
(4) Section 360, or, as the case may be, 361(2) or (4) or 362(2) and subsections (1) to (3) above, shall apply to a loan within section 360(1)(c), 361(1)(c) or (3)(b) or 362(1)(c) as if it, and any loan it replaces, were one loan, and so that—
(a) references to the application of the proceeds of the loan were references to the application of the proceeds of the original loan; and
(b) any restriction under subsection (1) above which applies to any loan which has been replaced shall apply to the loan which replaces it.
(5) In this section and sections 361 and 362—
“co-operative” means a common ownership enterprise or a co-operative enterprise as defined in section 2 of the [1976 c. 78.] Industrial Common Ownership Act 1976; and
“subsidiary” has the same meaning as for the purposes of section 2 of that Act.
(1) Interest is eligible for relief under section 353 if it is interest on a loan to the personal representatives of a deceased person, the proceeds of which are applied—
(a) in paying, before the grant of representation or confirmation, capital transfer tax or inheritance tax payable on the delivery of the personal representatives' account and attributable to the value of personal property to which the deceased was beneficially entitled immediately before his death and which vests in the personal representatives or would vest in them if the property were situated in the United Kingdom; or
(b) in paying off another loan interest on which would have been eligible for that relief by virtue of this section if the loan had not been paid off (on the assumption, if the loan was free of interest, that it carried interest);
and the interest is paid in respect of a period ending within one year from the making of the loan within paragraph (a) above.
(2) If or to the extent that any relief in respect of interest eligible for it under subsection (1) above cannot be given against income of the year in which the interest is paid because of an insufficiency of income in that year, it may instead be given against income of the preceding year of assessment, and so on; and if or to the extent that it cannot be so given it may instead be given against income of the year following that in which the interest is paid, and so on.
(3) Sufficient evidence of the amount of capital transfer tax or inheritance tax paid as mentioned in subsection (1)(a) above and of any statements relevant to its computation may be given by the production of a document purporting to be a certificate from the Board.
(4) For the purposes of subsections (1) to (3) above—
(a) references to capital transfer tax or inheritance tax include any interest payable on that tax; and
(b) references to interest in respect of a period ending within a given time apply whether or not interest continues to run after that time.
(1) Subject to the following provisions of this section, interest is eligible for relief under section 353 if it is interest on a loan in respect of which the following conditions are satisfied—
(a) that the loan was made as part of a scheme under which not less than nine-tenths of the proceeds of the loan were applied to the purchase by the person to whom it was made of an annuity ending with his life or with the life of the survivor of two or more persons (“the annuitants”) who include the person to whom the loan was made;
(b) that at the time the loan was made the person to whom it was made or each of the annuitants had attained the age of 65 years;
(c) that the loan was secured on land in the United Kingdom or the Republic of Ireland and the person to whom it was made or one of the annuitants owns an estate or interest in that land; and
(d) that, if the loan was made after 26th March 1974, the person to whom it was made or each of the annuitants uses the land on which it was secured as his only or main residence at the time the interest is paid.
(2) Interest is not eligible for relief by virtue of this section unless it is payable by the person to whom the loan was made or by one of the annuitants.
(3) If the loan was made after 26th March 1974 interest on it is eligible for relief by virtue of this section only to the extent that the amount on which it is payable does not exceed the qualifying maximum for the year of assessment; and if the interest is payable by two or more persons the interest payable by each of them is so eligible only to the extent that the amount on which it is payable does not exceed such amount as bears to the qualifying maximum for the year of assessment the same proportion as the interest payable by him bears to the interest payable by both or all of them.
(1) A person who claims relief under section 353 in respect of any payment of interest shall furnish to the inspector a statement in writing by the person to whom the payment is made, showing—
(a) the date when the debt was incurred;
(b) the amount of the debt when incurred;
(c) the interest paid in the year of assessment for which the claim is made (or, in the case of relief by virtue of section 355(4) or 364(2), the year of assessment for which the claim would be made but for an insufficiency of income); and
(d) the name and address of the debtor.
(2) Where any such interest as is mentioned in section 353 is paid, the person to whom it is paid shall, if the person who pays it so requests in writing, furnish him with such statement as regards that interest as is mentioned in subsection (1) above; and the duty imposed by this subsection shall be enforceable at the suit or instance of the person making the request.
(3) Subsections (1) and (2) above do not apply to interest paid to a building society, or to a local authority.
(1) In sections 354 to 366 as they apply throughout the United Kingdom and in relation to the Republic of Ireland—
“caravan” has the meaning given by section 29(1) of the [1960 c. 62.] Caravan Sites and Control of Development Act 1960;
“dependent relative” means, in relation to any person, a relative of his, or of his spouse, who is incapacitated by old age or infirmity from maintaining himself, or the mother of that person, or of his spouse, if the mother is widowed or living apart from her husband, or, in consequence of dissolution or annulment of marriage, a single woman;
“house-boat” means a boat or similar structure designed or adapted for use as a place of permanent habitation;
“large caravan” means one which has either or both of the following dimensions—
an overall length (excluding any draw bar) exceeding 22 feet;
an overall width exceeding seven feet six inches;
where “overall length” and “overall width” have the meanings given in Regulation 3 of the [S.I. 1966/1288.] Motor Vehicles (Construction and Use) Regulations 1966;
“separated” means separated under an order of a court of competent jurisdiction or by deed of separation or in such circumstances that the separation is likely to be permanent; and
“street works” means any works for the sewering, levelling, paving, metalling, flagging, channelling and making good of a road, and includes the provision of proper means for lighting a road.
(2) Sections 354(1) and 360 to 364 do not apply to a loan unless it is made—
(a) in connection with the application of money, and
(b) on the occasion of, or within what is in the circumstances a reasonable time from, the application of the money;
and those sections do not apply to a loan the proceeds of which are applied for some other purpose before being applied as mentioned in those sections.
(3) For the purposes of sections 354 to 364, the giving of credit for any money due from the purchaser under any sale shall be treated as the making of a loan to defray money applied by him in making the purchase.
(4) Where part only of a debt fulfils the conditions required under sections 354 to 364 for interest on the debt to be eligible for relief under section 353, such proportion of the interest shall be treated as eligible for relief under that section as is equal to the portion of the debt fulfilling those conditions at the time of the application of the money in question.
(5) In sections 357(1) and 365(3) references to the qualifying maximum for the year of assessment are references to such sum as Parliament may determine for the purpose for that year.
(1) Interest in respect of which relief is given under section 353 shall not be allowable as a deduction for any other purpose of the Income Tax Acts.
(2) Relief shall not be given under section 353 against income chargeable to corporation tax, and shall not be given against any other income of a company, except where both of the following conditions are satisfied, that is to say—
(a) that the company is not resident in the United Kingdom; and
(b) that the interest cannot be taken into account in computing corporation tax chargeable on the company.
(3) Where interest on any debt or liability is taken into account in the computation of profits or gains or losses for the purposes of Case I or II of Schedule D no relief shall be given under section 353—
(a) in respect of the payment of that interest; or
(b) in respect of interest on the same debt or liability which is paid in any year of assessment for which that computation is relevant.
(4) Where relief is given under section 353 in respect of the interest paid in any year of assessment on any debt or liability—
(a) that interest shall not be taken into account in the computation of profits or gains or losses for the purposes of Case I or II of Schedule D for any year of assessment; and
(b) interest on that debt or liability shall not be taken into account in that computation for any year of assessment for which the interest so paid could have been taken into account but for the relief.
(5) For the purposes of subsections (3) and (4) above, all interest capable of being taken into account in such a computation as is mentioned in those subsections which is payable by any person on money advanced to him on current account, whether advanced on one or more accounts or by the same or separate banks or other persons, shall be treated as interest payable on the same debt.
(6) References in subsections (3) and (4) above to relief given or an amount taken into account are references to relief given or an amount taken into account on a claim or in an assessment which has been finally determined.
(1) If a person who is a qualifying borrower makes a payment of relevant loan interest to which this section applies, he shall be entitled, on making the payment, to deduct and retain out of it a sum equal to income tax thereon at the basic rate for the year of assessment in which the payment becomes due.
(2) Where a sum is deducted under subsection (1) above from a payment of relevant loan interest—
(a) the person to whom the payment is made shall allow the deduction on receipt of the residue;
(b) the borrower shall be acquitted and discharged of so much money as is represented by the deduction as if the sum had been actually paid; and
(c) the sum deducted shall be treated as income tax paid by the person to whom the payment is made.
(3) Where payments of relevant loan interest to which this section applies become due in any year, the borrower shall be charged with tax at the basic rate for that year on an amount of income equal, subject to subsection (4) below, to the deduction which, in computing his total income, falls to be made on account of those payments.
(4) In any case where—
(a) payments of relevant loan interest to which this section applies become due in any year; and
(b) the total income of the borrower for that year is such that he cannot benefit from any or, as the case may be, the full amount of the relevant personal reliefs to which he is entitled;
so much of that full amount as cannot be deducted from his total income shall be deducted from the amount of income on which he is chargeable to tax by virtue of subsection (3) above.
(5) In subsection (4) above “relevant personal relief” means any relief to which the borrower concerned is entitled under Chapter I of Part VII other than—
(a) relief under section 266 which is given either by deduction by virtue of subsection (5) of that section or in accordance with paragraph 6 of Schedule 14; and
(b) relief under section 273;
and for the purposes of subsection (4) above the full amount of those reliefs means the amount of them determined without regard to section 276.
(6) Any person by whom a payment of relevant loan interest to which this section applies is received shall be entitled to recover from the Board, in accordance with regulations, an amount which by virtue of subsection (2)(c) above is treated as income tax paid by him; and any amount so recovered shall be treated for the purposes of the Tax Acts in like manner as the payment of relevant loan interest to which it relates.
(1) Subject to this section and sections 371 to 376, in this Part “relevant loan interest” means interest which is paid and payable in the United Kingdom to a qualifying lender and to which subsection (2) or (3) below applies.
(2) Subject to subsection (4) below, this subsection applies to interest if, disregarding section 353(2)—
(a) it is interest falling within section 354(1) or 365; and
(b) apart from section 74(o) and, where applicable, section 357 or 365(3), the whole of the interest either would be eligible for relief under section 353 or would be taken into account in a computation of profits or gains or losses for the purposes of Case I, II or VI of Schedule D for any year of assessment; and
(c) except in the case of interest falling within section 365, at the time the interest is paid, the condition in either section 355(1) or 356(1) is fulfilled with respect to the land, caravan or house-boat to which the loan concerned relates.
(3) This subsection applies to interest which is payable on a loan—
(a) in respect of which there was in force on 31st March 1983—
(i) an option notice given under section 24(2) of the [1967 c. 29.] Housing Subsidies Act 1967 (option mortgages) other than one falling within section 27(3)(b) of the [1982 c. 39.] Finance Act 1982; or
(ii) an option notice given under Article 142(2) of the [S.I. 1981/156 (N.I.3).] Housing (Northern Ireland) Order 1981 (option mortgages in Northern Ireland) other than one falling within section 27(4)(b) of the [1982 c. 39.] Finance Act 1982; and
(b) which relates to a dwelling in respect of which, at the time the interest is paid, the condition in section 355(1) is fulfilled.
(4) Subsection (2) above does not apply to interest payable on a loan the only security for which is a contract of insurance on human life or a contract to pay an annuity on human life.
(5) In determining whether subsection (2) above applies to any interest, sections 354(1) and 365 shall each have effect as if the words “or the Republic of Ireland” were omitted.
(6) In determining whether subsection (2)(c) above applies to any interest, section 355(1) shall have effect as if—
(a) in paragraph (a) after the word “used”, where it first occurs, there were inserted the words “wholly or to a substantial extent”; and
(b) paragraph (b) and the word “or” immediately preceding it were omitted.
(7) In determining for the purposes of subsection (3)(b) above whether the condition in section 355(1) is for the time being fulfilled with respect to any dwelling—
(a) subsection (1) of that section shall have effect as if for the words from “section 354” to “used” (where it first occurs) there were substituted the words “interest shall not be relevant loan interest for the purposes of section 369 unless the dwelling to which the loan relates is at the time the interest is paid used wholly or partly” and paragraph (b) and the word “or” immediately preceding it were omitted; and
(b) subsection (3) of that section shall have effect as if for “land, caravan or house-boat” there were substituted “dwelling”.
(1) Where at a time when interest on a loan (“the first loan”) is relevant loan interest, the borrower raises another loan to defray money to be applied as mentioned in section 354(1) with a view—
(a) to the use of other land or another caravan or house-boat wholly or partly as that person’s only or main residence, and
(b) to the disposal of the land, caravan, house-boat or dwelling to which the first loan relates,
then, in relation to interest payable within 12 months from the making of the other loan, the condition in section 355(1) shall be treated as continuing to be fulfilled.
(2) If in a case falling within subsection (1) above the interest on the first loan is interest to which section 370(2) applies and a direction is given under section 354(6) extending the period within which section 354 applies to that loan, subsection (1) above shall have effect in relation to that case as if for the reference to 12 months there were substituted a reference to such longer period as is specified in the direction.
(3) If in a case falling within subsection (1) above the interest on the first loan is interest to which section 370(3) applies and, having regard to the circumstances of that case, it appears to the Board reasonable to do so, they may direct that, in relation to that case, subsection (1) above shall have effect as if for the reference to 12 months there were substituted a reference to such longer period as meets the circumstances of the case.
(1) Notwithstanding anything in section 370(2), interest on a home improvement loan (other than interest to which section 370(3) applies) is not relevant loan interest unless—
(a) the qualifying lender to whom the interest is payable is a building society or a local authority or the Northern Ireland Housing Executive; or
(b) the qualifying lender to whom the interest is payable has given notice to the Board in accordance with regulations that he is prepared to have those home improvement loans in respect of which he is the lender and which were made after such date as he may specify in the notice brought within the tax deduction scheme.
(2) A qualifying lender may not specify a date in a notice under subsection (1) above which is earlier than the earliest date on which paragraph 2 of Schedule 7 to the [1982 c. 39.] Finance Act 1982 applied, or, if that paragraph did not apply, section 370 applies to interest on any loan (whether or not a home improvement loan) made by him.
(3) In this section “home improvement loan” means a loan made to defray money applied wholly in improving or developing land or buildings on land or in paying off another loan which was itself to defray money so applied.
(4) Section 354(2) shall apply for the purposes of this section as it applies for the purposes of sections 354 and 355.
(1) The provisions of this section have effect in relation to a loan where, by virtue of section 357(1) or section 365(3), only part of the interest on the loan would (apart from section 353(2)) be eligible for relief under section 353; and in this section any such loan is referred to as a “limited loan”.
(2) None of the interest on a limited loan is relevant loan interest unless—
(a) the loan is made on or after 6th April 1987; or
(b) the qualifying lender to whom the interest is payable has given notice to the Board in accordance with regulations that he is prepared to have limited loans of a description which includes that limited loan brought within the tax deduction scheme.
(3) If in a case where subsection (2) above applies section 357(1) requires an earlier loan to be taken into account for the purpose of determining that part of the limited loan interest on which would (apart from section 353(2)) be eligible for relief under section 353, none of the interest on the limited loan is relevant loan interest unless that earlier loan was made by the same qualifying lender as the limited loan.
(4) The reference in subsection (1) above to a loan only part of the interest on which would (apart from section 353(2)) be eligible for relief under section 353 includes a reference to each of two or more loans if, by virtue of subsection (3)(b) of section 357, the interest on the loans falls to be treated for the purposes of that section as payable on one loan; but, notwithstanding that each of those loans is accordingly a limited loan for the purposes of this section, none of the interest on any of them is relevant loan interest unless each of the loans was made by the same qualifying lender.
(5) Where the condition in paragraph (a) or (b) of subsection (2) above is fulfilled and, if subsection (3) or (4) above also applies, the condition in that subsection is also fulfilled only so much of the interest as (apart from section 353(2)) would be eligible for relief under section 353 is relevant loan interest.
(6) Where a loan on which interest is payable by the borrower was made jointly to the borrower and another person who is not the borrower’s husband or wife, the interest on the loan is not relevant loan interest unless—
(a) each of the persons to whom the loan was made is a qualifying borrower; and
(b) in relation to each of them considered separately, the whole of that interest is relevant loan interest, in accordance with sections 370 to 372 and this section.
(7) In subsection (6) above references to the borrower’s husband or wife do not include references to a separated husband or wife, and for this purpose “separated” has the meaning given by section 367(1).
Income and Corporation Taxes Act 1988