Part 3Employment income: earnings and benefits etc. treated as earnings
C1Chapter 7Taxable benefits: loans
Loan released or written off
188Loan released or written off: amount treated as earnings
1
If—
a
the whole or part of an employment-related loan is released or written off in a tax year, and
b
at the time when it is released or written off the employee holds the employment in relation to which the loan is an employment-related loan (“employment E”),
the amount released or written off is to be treated as earnings from the employment for that year.
2
But if the employment has terminated or become an excluded employment and there was a time when—
a
the whole or part of the loan was outstanding,
b
the employee held the employment, and
c
it was not an excluded employment,
subsection (1) applies as if the employment had not terminated or become an excluded employment.
3
Where subsection (2) applies, any loan which replaces directly or indirectly the employment-related loan is to be treated as an employment-related loan in relation to employment E if—
a
it would, if employment E had not terminated or become excluded employment, have been an employment-related loan in relation to employment E, and
b
it is not an employment-related loan in relation to other employment.
4
This section is subject to section 189 (exception where double charge).
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)