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HMRC internal manual

Employment Income Manual

Removal or transfer costs: expenses and benefits to which Section 271 ITEPA 2003 applies: bridging loans not provided by the employer: example

Section 284 ITEPA 2003


The value of the old home at the time the new home is bought is £100,000. The new home costs £120,000 and the employee takes out a loan of that amount to complete the purchase.The employer reimburses the loan interest paid until the property is sold.


The loan does not meet condition (d) in EIM03121 and the eligible interest is restricted to 100/120 of the total interest paid.

If the employer decides to fund the mortgage interest on the employee’s old home until it is sold, rather than funding a separate bridging loan, there will not be an eligible bridging loan, so the interest payments will not be an eligible expense.

Where the employer makes a cheap or interest-free loan (using the wide meaning in EIM26110), so that, apart from the removals relief there would be a charge under Part 3 Chapter 7 ITEPA 2003 (see EIM26101 onwards),see EIM03123.