Interest may be eligible for income tax relief (see ¶3050) if it is paid on a loan made to an individual to acquire ordinary shares in an employee-controlled company or to pay off another loan which would have qualified for interest relief.

Relief will only be given if the following conditions are satisfied:

(1)the company must be (from the date on which the shares are acquired to the date on which interest is paid):

(a)an unquoted company that is resident in the UK or, from 2014–15 onwards, another EEA state and is not resident outside the EEA; and

(b)a trading company or the holding company of a trading company;

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