BTX-Interest payable on loan to finance business expansion allowable or disallow?

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topcat
topcat Registered Posts: 452
in AAT Level 4 (Level 8 in Scotland)
BTX - Interest payable on loan to finance business expansion allowable or disallowable on adjusted profits computation?

I thought this would be disallowable as it is not for trading purposes? Although the answer has it as allowable and i can not understand why?

I am never sure if i am wrong or the answer is with the amount of errors in Kaplan

Any help appreciated!

Thanks

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  • MarieNoelle
    MarieNoelle Registered, Moderator Posts: 1,368
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    See here http://www.hmrc.gov.uk/manuals/bimmanual/bim45690.htm
  • Makkusu
    Makkusu Registered Posts: 94 Regular contributor ⭐
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    The loan is for a business expansion therefore it'd be allowable because it's in relation to the business.

    It's often easier to keep it simple on this basis, unless you're given a wealth of information on the loan, if so, more investigating is required.
  • topcat
    topcat Registered Posts: 452
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    Thank you both for your help it is much appreciated

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