A deduction in computing the taxable profits of a trade is allowable for certain incidental costs (see BIM45815) of obtaining finance by means of a loan or the issue of loan stock where the interest on that loan or stock is itself an allowable deduction. The legislation gives relief where such costs would otherwise be disallowed as incidental costs of the capital transaction of obtaining finance.
The relief applies in the limited and relatively self-contained area of raising loan finance for trade purposes. It does not extend to costs that may arise as a consequence of the particular terms on which loan finance may be raised.
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