Section 247
Companies may obtain relief for interest on certain loans, as provided for by Section 247 of the Taxes Consolidation Act. These are loans which are used to either obtain an interest in, or lend to:
- trading companies
- rental companies
- or
- certain holding companies of such companies.
How to qualify
To qualify, the borrowing company must:
- hold a minimum of 5% shareholding in the other company
- in certain circumstances, hold shares in a connected company
- and
- both companies (and, in certain circumstances, a connected company) must have at least one common director.
Furthermore, they must not recover capital, as provided for by Section 249 of the Taxes Consolidation Act:
- during the application of the loan until the interest is paid
- or
- within two years before the loan is applied.
Section 249 sets out rules in relation to the recovery of capital.
Please refer to the most recent edition of the Notes for Guidance - Taxes Consolidation Act 1997, Chapter 3, Part 8, for further details.