SCHEDULES

SCHEDULE 11Employment income provided through third parties: loans etc outstanding on 5 April 2019

PART 1Application of Part 7A of ITEPA 2003

Quasi-loans made in a depreciating currency

17

1

Paragraph 18 applies in relation to the quasi-loan if—

a

the quasi-loan currency is a currency other than sterling, and

b

it is reasonable to suppose that the main reason, or one of the main reasons, for the quasi-loan being made in that currency is that the quasi-loan currency is expected to depreciate during the quasi-loan period.

2

The “quasi-loan period”, in relation to a quasi-loan, is the period—

a

beginning at the time the quasi-loan is made, and

b

ending with the time by which, under the terms of the quasi-loan, the whole of the quasi-loan is to be repaid.

18

1

Where this paragraph applies in relation to the quasi-loan—

a

paragraphs 15 and 16 do not apply in relation to the quasi-loan, and

b

sub-paragraphs (2) to (5) apply for the purposes of calculating the amount of the quasi-loan that is outstanding at the time P is treated as taking the relevant step F1within paragraph 1.

2

The initial debt amount, in relation to the quasi-loan, is an amount equal to the total of—

a

the value in sterling, at the reference date, of the acquired debt, and

b

the value in sterling, at the reference date, of any additional debt.

3

The “reference date”—

a

in relation to a right within sub-paragraph (2)(a), means the date on which P acquires it, and

b

in relation to a right within sub-paragraph (2)(b), means the date on which P acquires it.

4

The repayment amount, in relation to the quasi-loan, is an amount equal to the total of—

a

the amount of the initial debt amount that has been repaid in sterling, and

b

where payments are made, in a currency other than sterling, by way of repayment of the initial debt amount, the amount equal to the sterling value of the payments.

5

The “sterling value” of a payment is its value in sterling on the date it is made.