Commentary on Sections Example 3 £150(Pe) – £50(E) = £100 Section 288: Limited exemption of certain bridging loans connected with employment moves
1178.This section gives details of what kind of loan is covered. It contains a formula for working out the day by which the loan must be repaid if there is to be no charge to tax under what was section 160 of ICTA (rewritten in Chapter 7 of Part 3 of this Act, mainly in section 175). It also includes some interpretative provisions. The section derives from section 191B(1) to (6), (10) to (12) and parts of (8), (9) and (13) of ICTA.
1179.Subsection (1) describes the circumstances in which the exemption arises.
1180.Subsection (2) describes in what circumstances a loan is within the term “a removal benefit” as used in subsection (1).
1181.Subsection (3) describes how there can be “unused removal benefit exemption” as mentioned in subsection (1).
1182.Subsection (4) shows how to calculate the amount of “the exempted loan discharge period”, as mentioned in subsection (1).
1183.Subsection (5) broadens the scope of who can raise a loan that qualifies for the exemption. Similarly it broadens who can have an interest in the new and/or former residence(s), other than, or as well as, the employee. It does that in similar terms to those applying to an interest in the new residence as covered in section 277(1), dealt with in paragraph 1129.
1184.Subsection (6) provides for the tax payable to be decided on a provisional basis, should the whole circumstances surrounding the loan not be known at the time the need to make a decision arises.