| Commentary

(h) Loans

| Commentary

(h)     Loans

The cash equivalent of the benefit of an employment-related cheap loan is taxable as earnings (ITEPA 2003 s 175). The cash equivalent of the benefit is the difference between the amount of interest that would have been payable at the official interest rate (as declared by the Treasury under the Finance Act 1989, s 178) and the amount of interest actually paid (s 175). With effect from 6 April 2021 the official interest rate has been 2%.

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