Clarification on HS340: Tax Relief for Loans to Family Investment Companies (FICs)

The HS340 guidance explains that tax relief is available for interest on loans when the borrowed funds are used for certain specified purposes. I’m looking to confirm whether this tax relief extends to loans linked to Family Investment Companies (FICs). For instance, if an individual takes out a mortgage in their personal name and subsequently lends the proceeds to a limited company through a Director's Loan, would the individual still qualify for tax relief on the mortgage interest? This assumes the company uses the funds to purchase shares or invest in publicly traded companies, rather than for purposes like buying machinery (as highlighted in the HS340 examples). Any clarification or reference to relevant HMRC guidance would be greatly appreciated.

Hi ,
 

HMRC cannot comment on tax planning arrangements.  You may wish to seek advice from a professional accountant. If, having fully reviewed the guidance you haven’t been able to find the information you need or you are genuinely uncertain about how the legislation applies, you may consider making an application to the Non-Statutory Clearance Service. Guidance on this can also be found on our website at Find out about the Non-Statutory Clearance Service  . Thank you .