Section 384 — Income Tax Act 2007: General restrictions on relief under Chapter

General restrictions on relief under Chapter 384 1 Relief is not to be given under this Chapter for interest on a debt incurred—

a by overdrawing an account, or b by debiting the account of any person as the holder of a credit card or under similar arrangements.

2 If the interest paid on a loan in a tax year exceeds a reasonable commercial amount of interest on the loan for the relevant period , relief is not to be given under this Chapter for so much of the interest as represents the excess.

3 The relevant period is the tax year or, if the loan exists for part only of the tax year, the part of the tax year for which the loan exists.

4 A reasonable commercial amount of interest on the loan for the relevant period is an amount which, together with any interest paid before that period (other than unrelieved interest), represents a reasonable commercial rate of interest on the loan from the date it was made to the end of that period. 5 “ Unrelieved interest ” means interest which because of subsection (2) is not eligible for relief under this Chapter.