Part 3Employment income: earnings and benefits etc. treated as earnings
C1Chapter 7Taxable benefits: loans
Benefit of taxable cheap loan treated as earnings
180Threshold for benefit of loan to be treated as earnings
1
The cash equivalent of the benefit of an employment-related loan is not to be treated as earnings of the employment for a tax year under section 175(1)—
a
if the normal F7£10,000 threshold is not exceeded, or
b
where the loan is a non-qualifying loan and that threshold is exceeded, if the F7£10,000 threshold for non-qualifying loans is not exceeded.
2
3
The F8£10,000 threshold for non-qualifying loans is not exceeded if at all times in the year the amount outstanding on the loan (or if two or more employment-related loans which are non-qualifying loans are outstanding in the year, the aggregate of the amounts outstanding on them) does not exceed F8£10,000.
4
In this section a “non-qualifying loan” means a taxable cheap loan which is not a qualifying loan.
5
For the purposes of this section a loan is a “qualifying 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 or part of that interest—
a
is eligible for relief under section 353 of ICTAF4or section 383 of ITA 2007 (relief for interest payments),
b
would be eligible for relief under F5section 353 of ICTA 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),
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)