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HMRC internal manual

Savings and Investment Manual

Relief for interest paid: interest in a partnership: film partnerships

Film partnerships

ITA07/S399 (4) provides that where the partnership is a ‘film partnership’, only 40% of the interest paid on a loan to buy into such a partnership is eligible for relief.

ITA07/S400 sets out the circumstances in which relief is restricted to 40%.

The restriction applies only if the money is invested in a film partnership and secured on an asset or activity of a second partnership, the ‘investment partnership’, of which the individual is or has been a member. The individual must also be entitled to a lower proportion of the profits of the investment partnership than the proportion of capital that he or she contributed to that partnership.

In relation to the calculation of the latter proportion, partnership capital takes its meaning from generally accepted accounting practice and includes amounts lent to the partnership by the partners or persons connected with the partners. In identifying which part of that capital has been contributed by the claimant, only amounts that actually form part of the total investment partnership’s capital are taken into account.

See BIM56300 for more on deductions for films and audio products.