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HMRC internal manual

Employment Income Manual

Particular benefits: loans written off on termination of employment: interaction with £30,000 exemption

Section 189 ITEPA 2003 and Part 6 Chapter 3 ITEPA 2003The release or writing off of a loan could in certain circumstances also fall within the wording of Part 6 Chapter 3 ITEPA 2003 which taxes termination payments on retirement etc (see

EIM12805 onwards).

Where this is the case the charge under Section 188(1) ITEPA 2003 on the full amount of the release takes precedence (Section 189(2) ITEPA 2003). This means that an employee in those circumstances cannot have the benefit of the £30,000 exemption applying to termination payments (see EIM13505).