HMRC internal manual

Employment Income Manual

EIM26106 - The benefits code: beneficial loans: official rates for certain foreign currencies

Section 181(2) ITEPA 2003

Currency Period from Period to Official Rate
Japanese Yen 6 June 1994   3.9%
Swiss franc 6 June 1994 5 July 1994 5.7%
  6 July 1994   5.5%

There has been no change in either rate since 1994.

These rates apply to loans made

  • in the currency of a country or territory outside the UK, and
  • to an employee

    • who normally lives in that country or territory, and
    • who has lived in that country or territory at some time in the tax year or in the previous five years.

The intention of these rules is to give relief for employees working temporarily in the UK, where interest rates in the overseas country are lower than interest rates in the UK. The relief does not apply to employees who come to the UK and live here permanently.

The expressions “normally lives” and “lived” have their natural commonsense meaning. An employee who came to work in the UK for four years and who returned home after the four years can be said to “normally live” in the home country. It is not necessary to maintain a residence in the overseas country during the period of employment in the UK. The terms “lives” and “has lived” connote a degree of continuance if not permanence. A holiday in the home country for an employee working in the UK would not in itself be sufficient to establish that the employee had “lived” in the overseas country within the meaning of these rules. “Living” implies more than returning for a short holiday.