Income Tax (Earnings and Pensions) Act 2003

[F1446SNotional loanU.K.

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(1)Where this Chapter applies an interest-free loan (“the notional loan”) is to be treated as having been made to the employee by the employer at the time of the acquisition.

(2)The provisions listed in subsection (3) apply as though the notional loan were an employment-related loan as defined in section 174 if and for so long as the employment has not terminated.

(3)The provisions are—

  • section 175 (benefit of taxable cheap loan treated as earnings),

  • section 178 (exception for loans where interest qualifies for tax relief),

  • section 180 (threshold for benefit of loan to be treated as earnings),

  • section 182 (normal method of calculation: averaging),

  • section 183 (alternative method of calculation),

  • section 184 (interest treated as paid),

  • section 185 (apportionment of cash equivalent in case of joint loan etc), and

  • section 187 (aggregation of loans by close company to director).]

Textual Amendments

F1Pt. 7 Ch. 3C inserted (with effect in accordance with Sch. 22 para. 7(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 7(1)