Section 35: Interest expenses.

(1) Subject to subsection (3). a taxpayer that is not a bank is entitled to a deduction for a proportion of the interest expenses paid in respect of a debt obligation incurred by the taxpayer to produce assessable income. (2) The proportion of interest expenses that are deductible under subsection (1) is as stated in paragraph 3 of the Ninth Schedule. (3) Subsection (1) does not apply to interest expenses that are— a) included in the adjusted cost base of an asset; or b) borne on a loan from a shareholder or his associate to the extent of interest of one half the excess of that loan over the shareholder's paid-up shares.