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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Particular benefits: loans released or written off

Section 62 ITEPA 2003

Sometimes a loan or part of a loan is released or written off. This means the borrower does not have to repay the lender. It is also sometimes referred to as a loan being waived.

If the loan was made by the employer and the release or writing off can only be ascribed to the fact that the borrower is an employee, the amount released or written off will be earnings chargeable under Section 62 ITEPA 2003. This is so whether or not for 2015/16 and earlier the employee is in an excluded employment (see EIM01490).

Where a charge arises under Section 62 on the full amount released or written off the instructions at EIM21741  onwards do not apply.

Where the full amount released or written off is not chargeable under Section 62 look at EIM21741 onwards.