Part 3Employment income: earnings and benefits etc. treated as earnings
C1Chapter 7Taxable benefits: loans
Supplementary provisions relating to taxable cheap loans
184Interest treated as paid
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 F2the 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).
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)