Finance Act, 2000

• Permanent Page URL

Amendment of section 244 (relief for interest paid on certain home loans) of Principal Act.

17.— As respects the year of assessment 2000-2001 and subsequent years of assessment, section 244 of the Principal Act is amended—

(a) in subsection (1)—

(i) by the substitution of the following for the definition of “dependent relative”:

“‘dependent relative’, in relation to an individual, means any of the persons mentioned in paragraph (a) or (b) of the definition of ‘dependent relative’ in section 466(1) in respect of whom the individual is entitled to a reduction of tax under that section;”,

(ii) by the substitution of the following for the definition of “relievable interest”:

“‘relievable interest’, in relation to an individual and a year of assessment, means—

(i) in the case of—

(I) an individual assessed to tax for the year of assessment in accordance with section 1017, or

(II) a widowed individual,

the amount of qualifying interest paid by the individual in the year of assessment or, if less, £4,000,

(ii) in the case of any other individual, the amount of qualifying interest paid by the individual in the year of assessment or, if less, £2,000,

but, notwithstanding the preceding provisions of this definition and subject to paragraph (c), as respects the first 5 years of assessment for which there is an entitlement to relief under this section in respect of a qualifying loan, ‘relievable interest’, in relation to an individual and a year of assessment, shall mean—

(iii) in the case of—

(I) an individual assessed to tax for the year of assessment in accordance with section 1017, or

(II) a widowed individual,

the amount of qualifying interest paid by the individual in the year of assessment or, if less, £5,000,

(iv) in the case of any other individual, the amount of qualifying interest paid by the individual in the year of assessment or, if less, £2,500;”,

and

(iii) by the substitution of the following for paragraph (c):

“(c) The number of years of assessment for which the amount of relievable interest is to be determined by reference to subparagraph (iii) or (iv) of the definition of ‘relievable interest’ shall be reduced by one year of assessment for each year of assessment in which an individual was entitled to relief for a year of assessment before the year 1997-1998 under section 76(1) or 496 of, or paragraph 1(2) of Part III of Schedule 6 to, the Income Tax Act, 1967 .”,

and

(b) in subsection (3), by the substitution of the following for paragraph (a):

“(a) Where the amount of relievable interest is determined by reference to subparagraph (iii) or (iv) of the definition of ‘relievable interest’, then, notwithstanding any other provision of the Tax Acts, in the case of an individual who has elected or could be deemed to have duly elected to be assessed to tax for the year of assessment in accordance with section 1017, where either—

(i) the individual, or

(ii) the individual's spouse,

was previously entitled to relief under this section or under section 76(1) or 496 of, or paragraph 1(2) of Part III of Schedule 6 to, the Income Tax Act, 1967, and the other person was not so entitled—

(I) the relief to be given under this section, other than that part of the relief (in this subsection referred to as ‘the additional relief’) which is represented by the difference between the relievable interest and the amount which would have been the amount of the relievable interest if this had been determined by reference to subparagraph (i) or (ii) of that definition, shall be treated as given in equal proportions to the individual and that individual's spouse for that year of assessment, and

(II) the additional relief shall be reduced by 50 per cent and the additional relief, as so reduced, shall be given only to the person who was not previously entitled to relief under this section or under section 76(1) or 496 of, or paragraph 1(2) of Part III of Schedule 6 to, the Income Tax Act, 1967 .”.