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HMRC internal manual

Employment Income Manual

The benefits code: beneficial loans: exemption for commercial loans: meaning of substantial proportion

Section 176(3)(b) ITEPA 2003

For the purposes of exemption under Section 176(1) ITEPA 2003 (see EIM26158 and EIM26170), the substantial proportion test operates by reference to numbers of loans and not by reference to total amounts lent.

So if 50% or more of the comparable loans made at or about the time when the employee loan was made or varied were made to members of the public at large this test will be satisfied. Whether a proportion below 50% would be enough will be a matter of fact and degree.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)