SolvedCOM53200 | Claims/reliefs: other reliefs: S458 CTA 2010, repayment interest
From HM Revenue & Customs · COTAX Manual
The amount of repayment interest due under Section 826(4) Income and Corporation Taxes Act (ICTA) 88 because of a claim under Section 458 (S458), 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 Accounting Period (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.
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