Expenditure: interest and finance charges
No payment of interest is allowable expenditure. The only exception is interest paid by a company as described below.
Interest charged to capital by certain companies - TCGA92/S40
TCGA92/S40 applies where a company finances building work out of borrowed money. When the building is sold, the expenditure which qualifies for allowance under TCGA92/S38 is to include any interest paid up to the date of disposal in respect of that expenditure. This does not apply to interest which is a charge on income, or which is otherwise deductible from income.
Costs of arranging a mortgage
Fees of building societies, solicitors and valuers and any other costs of arranging a mortgage or other loan in connection with the acquisition of an asset should not be treated as allowable expenditure.
Except for the cost of insurance of a chattel in transit to the point of sale, premiums paid under a policy of insurance against risk of damage to or depreciation of the asset are not allowable expenditure.