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HMRC internal manual

Business Income Manual

HM Revenue & Customs
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Private Finance Initiative (PFI): interest: contents

Interest paid by corporate PFI operators is dealt with under the loan relationships legislation. General guidance on loan relationships is at CFM30000 onwards.

Some specific guidance on the application of thin capitalisation principles to PFI deals is given at INTM568000.

Notional interest

Where, as an accounting exercise, a figure representing accrued finance income on a finance debtor, i.e. notional interest, is credited to the profit and loss account (see BIM64125), neither it, nor the corresponding debit to the finance debtor, is interest on a money debt for the purposes of the loan relationship legislation.

The guidance on interest is arranged as follows: