The types of Qualifying Interest are as follows;
- Interest paid on a loan to purchase an interest in a partnership or to make a contribution to a partnership of capital or a loan.
- Interest paid on a loan to purchase plant and machinery used in the business by a partner. Interest is allowed for the year of purchase and the next three years.
- Interest paid on a loan to purchase plant and machinery by an employee if used in the performance of duties.
- Interest on a loan to purchase an interest in a close company OR interest paid on a load to make a loan to a CLOSE COMPANY (provided the individual owns >5% of the company OR is a full time employee / director)
Interest must be at a reasonable commercial rate, otherwise it will be disallowed.