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• Income Tax (Restriction of Tax Relief on Interest) (Guernsey) Law, 2001

Income Tax (Restriction of Tax Relief on Interest) (Guernsey) Law, 2001

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PROJET DE LOI

ENTITLED

The Income Tax (Restriction of Tax Relief on Interest) (Guernsey) Law, 2001

THE STATES, in pursuance of their resolution of the 25^th day of November, 1999[a], have approved the following provisions which, subject to the Sanction of Her Most Excellent Majesty in Council, shall have force of law in the islands of Guernsey and Herm.

Restriction of income tax relief on interest paid.

1.      (1)      The Income Tax (Guernsey) Law, 1975, as amended[b] (hereinafter called "the Income Tax Law") is further amended in accordance with the provisions of this section.

(2)      After section 14(4)[c] of the Income Tax Law insert the following subsection -

"(5)      The provisions of this section are subject to the provisions of any Ordinance under section 39A of this Law.".

(3)      After section 38(3) of the Income Tax Law[d] insert the following subsection -

"(4)      The provisions of this section are subject to the provisions of any Ordinance under section 39A of this Law.".

(4)      After section 39 of the Income Tax Law insert the following section -

"Power of States to restrict relief on interest paid.

39A.      (1)      The States may by Ordinance make such provision as they think fit in respect of the abolition, restriction, limitation or apportionment of relief from the payment of income tax for interest paid on money borrowed that would otherwise be allowable under any other provision of this Law (other than interest properly deductible as a business expense under section 7 of this Law).

(2)      An Ordinance under subsection (1) -

(a)      without limitation, may make provision by reference to -

(i)      the amount of the loan on which the interest is payable;

(ii)      the amount of the interest which is payable;

(iii)      the purpose to which the loan on which the interest is payable is applied;

(iv)      the use of the property (real or personal) for the purchase or otherwise for the purposes of which the loan was obtained;

      (b)      without limitation, may prescribe -

(i)      allowances, formulae or other bases for the computation of relief, or the manner in which such allowances, formulae or other bases are to be calculated;

(ii)      conditions subject to which relief is to be given;

(c)      may be amended or repealed by a subsequent Ordinance thereunder;

(d)      may contain such consequential, incidental, transitional and supplementary provision (including, without limitation, provision in respect of the avoidance of income tax) as the States think fit.

(3)      The power conferred by this section to make an Ordinance may be exercised -

(a)      in relation to all cases to which the power extends, or in relation to all those cases subject to specified exceptions, or in relation to any specified cases or classes of cases;

(b)      so as to make, as respects the cases in relation to which it is exercised -

(i)      the full provision to which the power extends, or any lesser provision (whether by way of exception or otherwise);

(ii)      the same provision for all cases, or different provision for different cases or classes of cases, or different provision for the same case or class of case for different purposes;

(iii)      any such provision either unconditionally or subject to any prescribed conditions.".

(5)      After section 168 of the Income Tax Law[e], insert the following section -

"Ordinances restricting relief on interest paid.

168A.      The provisions of sections 164 to 168 are subject to the provisions of any Ordinance under section 39A of this Law.".

(6)      At the beginning of section 174(3) of the Income Tax Law, insert the words "Subject to the provisions of any Ordinance under section 39A of this Law,".

(7)      In section 188E(2) of the Income Tax Law[f], at the beginning of paragraph (c), insert the words "subject to the provisions of any Ordinance under section 39A of this Law,".

Citation.

2.      This Law may be cited as the Income Tax (Restriction of Tax Relief on Interest) (Guernsey) Law, 2001.

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