Statutory Instrument 1987 No. 404

The Income Tax (Interest Relief) (Housing Associations) (No. 3) Regulations 1987

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© Crown Copyright 1987

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1987 No. 404

INCOME TAX

The Income Tax (Interest Relief) (Housing Associations) (No. 3) Regulations 1987

The Treasury, in exercise of the powers conferred on them by section 29 of the Finance Act 1982^[1] , hereby make the following Regulations:

Citation, commencement and interpretation
    1.—(1)  These Regulations may be cited as the Income Tax (Interest Relief) (Housing Associations) (No. 3) Regulations 1987 and shall come into force on 6th April 1987.

    (2)  In these Regulations"the Housing Associations Regulations" means the Income Tax (Interest Relief) (Housing Associations) Regulations 1983^[2] .

Amendments to the Housing Associations Regulations
    2.    In paragraph (b) of regulation 5 of the Housing Associations Regulations (which provides, in the case of housing associations paying mortgage interest on limited loans, for a substituted paragraph 5 in Schedule 7 to the Finance Act 1982)—
 (a) there shall be added at the end of sub-paragraph (2) of that substituted paragraph and in sub-paragraph (4) of the same paragraph after the words"sub-paragraph (2) above" the words"or the loan is a limited loan made on or after 6th April 1987" ; and
 (b) there shall be inserted in that substituted paragraph after sub-paragraph (3)—
"  (3A)  The reference in sub-paragraph (1) above to a loan only part of the interest on which would (apart from the principal section) be eligible for relief under section 75 of the Finance Act 1972 includes a reference to each of two or more loans if, by virtue of sub- paragraph (4)(b) of paragraph 5 of the 1974 Schedule, the interest on the loans falls to be treated for the purposes of that paragraph as payable on one loan; but, notwithstanding that each of those loans is accordingly a limited loan for the purposes of this paragraph, none of the interest on any of them is relevant loan interest unless each of the loans was made by the same qualifying lender." .

Mark Lennox-Boyd

Michael Neubert

Two of the Lords Commissioners of Her Majesty's Treasury

12th March 1987

The Income Tax (Interest Relief) (Housing Associations) Regulations 1983 (the 1983 Regulations) applied (with modifications) the relevant provisions of the Finance Act 1982 (the tax deduction scheme for giving mortgage interest relief at source) for housing associations.

These Regulations amend the 1983 Regulations as a consequence of amendments made to the Finance Act 1982 by section 17 of the Finance Act 1983 and section 37 of the Finance Act 1985.

The amendments provide, in relation to housing associations, for the bringing into the tax deduction scheme of all"limited" loans (loans over the qualifying maximum for tax relief) made on or after 6th April 1987 (paragraph (a) of regulation 2) and that where two or more loans are made simultaneously to a borrower by different lenders and the total of them exceeds the qualifying maximum for tax relief the loans are to remain outside the scheme (paragraph (b) of regulation 2).

[1] 1982 c. 39; section 29(1)(b) was amended by section 56(2) of the Finance Act 1984 (c. 43) and by section 4 of, and Schedule 2 paragraph 54(2) to, the Housing (Consequential Provisions) Act 1985 (c. 71); sections 26 and 28 and Schedule 7 were applied to housing associations with modifications by S.I. 1983/368 regulations 3, 4 and 5; and Schedule 7 was amended by section 17(1), (2), (3) and (4) of the Finance Act 1983 (c. 28) and section 37(2), (3) and (4) of the Finance Act 1985 (c. 54). back

[2] S.I. 1983/368 was amended by S.I. 1984/1653. back