EIM26101 - »Ê¹ÚÌåÓýapp benefits code: beneficial loans: general

Part 3 Chapter 7 ITEPA 2003

An employee can obtain a benefit when provided with an employment-related cheap or interest-free loan. »Ê¹ÚÌåÓýapp benefit is the difference between the interest the employee pays, if any, and the commercial rate the employee would have to pay on a loan obtained elsewhere. Such loans are called beneficial loans.

An employee can also benefit if an employment-related loan is released or written off. He or she is then no longer obliged to repay the amount that was lent.

»Ê¹ÚÌåÓýappre are special rules relating to the taxation of these benefits.

»Ê¹ÚÌåÓýapp relevant guidance is:

  • beneficial loans, see EIM26102 onwards
  • loans released or written off, see EIM01490 and EIM21740 onwards