This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Employment Income Manual

Para 13: loan charge relevant step: rights to repayment or asset transfer in respect of quasi-loan assigned to employee or employer

Schedule 11 F(No 2)A 2017

The loan charge is based on the amount of the quasi-loan which is outstanding at the relevant repayment date. One potential method of removing the loan charge would be for the quasi-loan to be outstanding to the employee or employer themselves. If the loan was owed to the employer, it could be said that the loan charge relevant step would not be taken by a relevant third person.

In order to avoid this Para 13 applies where:

  • a person has made a quasi-loan to relevant person on or after 6 April 1999 and
  • before the end of 5 April 2019, the employee or employer acquires a right to repayment of all or part of the quasi-loan or a right to a transfer of an asset.

The amount of the quasi-loan which becomes due to be repaid or the value of the asset to be transferred to the employee or employer is treated as an amount which is outstanding immediately before the end of 5 April 2019. It is also the amount for which P is treated as taking a relevant step on that date.

Where the right acquired is to a payment of an amount, the value is the amount of that payment. Where the right acquired is to receive the transfer of an asset, the value is the higher of the market value of the asset at the time the right is acquired or the cost of the asset at that time.