Income Tax (Earnings and Pensions) Act 2003

184 Interest treated as paid U.K.

(1) This section applies where [F1 —

(a) the cash equivalent of the benefit of a taxable cheap loan is treated as earnings from an employee's employment for a tax year under section 175(1), or

(b) the relevant amount in respect of the benefit of a taxable cheap loan is treated as earnings from an employee's employment for a tax year under section 175(1A).]

(2) The employee is to be treated for the purposes of the Tax Acts as having paid interest on the loan in that year equal to the cash equivalent.

(3) But the employee is not to be treated as having paid that interest for the purposes of this Chapter or of any of [F2 the following Chapters of this Part—

• Chapter 3 (taxable benefits: expenses payments);

• Chapter 6 (taxable benefits: cars, vans and related benefits);

• Chapter 10 (taxable benefits: residual liability to charge).]

(4) The interest is to be treated—

(a) as accruing during the period in the tax year during which the employee holds the employment and the loan is outstanding, and

(b) as paid by the employee at the end of the period.

(5) The interest is not to be treated—

(a) as income of the person making the loan, or

(b) as relevant loan interest to which section 369 of ICTA applies (mortgage interest payable under deduction of tax).

Textual Amendments

F1 Words in s. 184(1) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 46

F2 Words in s. 184(3) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 11