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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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The benefits code: beneficial loans: exemptions from charge: general

No charge is made on beneficial loans obtained by reason of a person’s employment in the circumstances summarised in the following table. The relevant instructions should always be consulted.

### Circumstances ### Relevant instructions
The loan is a qualifying loan (see EIM26136) on which the whole of any interest qualifies for relief. EIM26135
The aggregate balance outstanding on all beneficial loans does not exceed £10,000 at any time in the year (£5,000 for 2013/14 and earlier tax years). EIM26140
The aggregate balance on all non-qualifying loans (see EIM26137) does not exceed £10,000 at any time in the year (£5,000 for 2013/14 and earlier tax years). EIM26145
The employee shows that he or she derived no benefit from a loan made to his or her relative. EIM26150
The loan is for a fixed period at a fixed rate of interest and the loan was first made:  
  • before 6 April 1978 at a genuine commercial rate, or
  • on or after 6 April 1978 at an interest rate equal to, or more than, the appropriate official rate(s) for the year the loan was made. EIM26152  
      Advances for necessary expenses made by an employer to an employee (subject to certain limits). EIM26155
      A loan or credit on terms that are available to and substantially taken up by the public at large, made by a person whose business includes the lending of money or the giving of credit. EIM26158