Part 3Employment income: earnings and benefits etc. treated as earnings
C1Chapter 7Taxable benefits: loans
Introduction
174Employment-related loans
1
For the purposes of this Chapter an employment-related loan is a loan—
a
made to an employee or a relative of an employee, and
b
of a class described in subsection (2).
2
For the purposes of this Chapter the classes of employment-related loan are—
A
A loan made by the employee’s employer.
B
A loan made by a company or partnership over which the employee’s employer had control.
C
A loan made by a company or partnership by which the employer (being a company or partnership) was controlled.
D
A loan made by a company or partnership which was controlled by a person by whom the employer (being a company or partnership) was controlled.
E
A loan made by a person having a material interest in—
a
a close company which was the employer, had control over the employer or was controlled by the employer, or
b
a company or partnership controlling that close company.
3
In this section—
“employee” includes a prospective employee, and
“employer” includes a prospective employer.
4
References in this section to a loan being made by a person extend to a person who—
a
assumes the rights and liabilities of the person who originally made the loan, or
b
arranges, guarantees or in any way facilitates the continuation of a loan already in existence.
5
A loan is not an employment-related loan if—
a
it is made by an individual in the normal course of the individual’s domestic, family or personal relationships, or
b
it is made to a relative of the employee and the employee derives no benefit from it.
6
For the purposes of this section a person (“X”) is a relative of another (“Y”) if X is—
a
Y’s spouse F1or civil partner ,
b
a parent, child or remoter relation in the direct line either of Y or of Y’s spouse F1or civil partner ,
c
a brother or sister of Y or of Y’s spouse F1or civil partner , or
d
the spouse F1or civil partner of a person falling within paragraph (b) or (c).
Pt. 3 Ch. 7 extended (with modifications) (with effect in accordance with s. 97(3) of the amending Act) by Finance Act 2006 (c. 25), s. 97(1)(2)