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Manufactured interest

Manufactured interest

Hi all

Forgive me, this is pretty basic stuff, but my CT knowledge is very rusty, and for all my Googling I'm going round in circles...

Company A makes a loan to company B for £100,000 at 5% interest.  As far as I'm concerned the interest paid, one company to the other, is paid gross, but can I for the life of me find anything to confirm this!  The best I've found is a mention of a change in FA2001 that seems to cover the situation, but is that still extant?

As a side question, does 'manufactured interest' have to be income from shares and securities, can it be from loans such as the above?


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By DMGbus
17th Aug 2012 13:33

CT61 notes say...


Manufactured interest paid

Companies paying manufactured interest must account for basic rate Income Tax on this, unless the payment is either:

in respect of interest on a giltedged security or a security which pays interest without deducting tax, or to a company chargeable to Corporation Tax on it.  ========================================= 


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