7.2.1 Basic principles

Under general principles, the interest on a loan should be a deductible expense of the property business provided that it is a revenue item and incurred wholly and exclusively for the purpose of the business. In fact, it is only the ‘wholly and exclusively’ test that needs to be satisfied, since ITTOIA 2005, s. 29 specifically states that interest is always a revenue item, irrespective of the nature of the loan.

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