DBR3
Joined: 9/20/2024
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When is tax due on interest on a PIK loan note?
If a Payment in Kind (PIK) loan note was issued in the 2023-24 tax year with a 15% fixed annual interest rate, compounding monthly and is then redeemed and paid out in the 2024-25 tax year, in which tax year(s) is the tax on the interest due for an individual? In the year of issue (2023-24 tax year) Monthly at the point of compounding (in both tax years) Or on redemption (2024-25 tax year) Thank in advance