Which of the following statements about the tax impact on debt finance is correct?

Interest on debt is treated as a tax-deductible expense, so it is deducted in arriving at profit before tax:

A – incorrect: security over assets doesn’t affect tax relief on interest.

B – incorrect: preference dividends are not tax-deductible.

C – incorrect: if it were deducted from post-tax profits there would be no tax relief.

D – correct: interest is deducted from pre-tax profits.