Late interest: deferral in certain circumstances

For loan relationships entered into before 3 December 2014 where the ‘actual accrual period’ began before 1 January 2016, a debtor company’s deduction for interest payable is deferred until the accounting period in which the interest is actually paid where:

(1)The debtor and creditor companies are connected and the creditor company is tax resident or effectively managed in a ‘non-qualifying territory’ (¶717-325);

(2)the debtor company is a close company in certain circumstances;

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