Section 502 | Exception from section 501 for loans to buy life annuities

(1)Section 501 does not apply to a loan made under a contract for a life annuity if all the interest on the loan is eligible for tax relief.

(2)If part of the interest is eligible for tax relief, section 501 only applies to the part of the loan carrying ineligible interest.

(3)For the purposes of this section, interest is eligible for tax relief if it is eligible for relief under section 353 of ICTA (general provision for relief for interest) as a result of section 365 of ICTA (loan to buy life annuity).