Commentary on Sections Example 3 £150(Pe) – £50(E) = £100 Section 184: Interest treated as paid
715.This section treats the cash equivalent of an employment-related loan as if it were interest paid so that tax relief can be given where the loan is for a qualifying purpose. It derives from parts of section 160(1) and section 160(1A) of ICTA.
716.Subsection (1) sets out the circumstances in which the section applies.
717.Subsection (2) treats the employee as having paid interest equal to the cash equivalent of the benefit.
718.Subsection (3) prevents a claim that the interest should be treated as paid and so qualify as a deduction from the amounts treated as earnings by another chapter of the benefits code.
719.Subsection (4) provides the mechanism for allocating to a tax year the cash equivalent to be treated as interest.
720.Subsection (5) makes it clear that, although the cash equivalent is treated as if it were interest paid by the employee, it is not treated as interest received by the lender.