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HMRC internal manual

COTAX Manual

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HM Revenue & Customs
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Claims / reliefs: other reliefs: S458 CTA 2010 - repayment interest

The amount of repayment interest due under Section 826(4) ICTA 88 because of a claim under Section 458, depends on when the repayment, release or write-off of the loan takes place.

If the loan is repaid, released or written off earlier than nine months and one day after the end of the AP in which the loan was made, interest is due from the later of:

  • nine months after the AP in which the loan was made or
  • the date on which the tax to be repaid was paid.

If the loan is repaid, released or written off more than nine months after the end of the AP in which it was made, interest is due from the later of:

  • nine months after the AP in which the repayment, release or write off was made or
  • the date on which the tax to be repaid was paid.

COTAX handles this automatically. When the caseworker gives effect to the relief by using function RAMA (Record / Amend Assessment) to record a taxpayer amendment or process a claim, COTAX uses the end date of the AP during which the loan was repaid, released or written off as the effective date of payment (EDP) for the S458 credit it creates. This allows it to calculate the correct repayment interest to add to the repayment.

See:

  • COM53012 for a list of functions to use in particular situations
  • COM53013 for legislation applying to this subject.