Part 3Employment income: earnings and benefits etc. treated as earnings

Chapter 7Taxable benefits: loans

Benefit of taxable cheap loan treated as earnings

178Exception for loans where interest qualifies for tax relief

A loan is not a taxable cheap loan in relation to a particular tax year if, assuming interest is paid on the loan for that year (whether or not it is in fact paid), the whole of that interest—

a

is eligible for relief under section 353 of ICTA (general provision for relief for payments of interest, excluding MIRAS),

b

would be eligible for relief under that section but for the fact that it is a payment of relevant loan interest to which section 369 of ICTA applies (mortgage interest payable under deduction of tax),

c

is deductible in computing the amount of the profits to be charged F1to tax in respect of a trade, profession or vocation carried on F2wholly or partly in the United Kingdom by the person to whom the loan is made, or

d

is deductible in computing the amount of the profits to be charged F3to tax in respect of a UK property business, or a Schedule A business, carried on by that person.