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Beneficial loan exceptions

Property letting businesses

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I thought that I had seen commentary on this but have so far been unable to locate it. Cheap loans are excluded from the BIK charge if the interest would otherwise have been deductible when computing profits of a property business. This is fine if the business is Furnished Holiday Letting, but what if it's an ordinary Buy To Let? Since the time will come when none of the interest will be deductible, does this mean that the exception for such loans will disappear?

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Replying to Accountant A:
Psycho
By Wilson Philips
11th Mar 2019 19:16

Thanks but that doesn’t really answer my question, unless you think that it confirms that such loans will no longer be excepted once interest relief is no longer given by deduction.

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Replying to Wilson Philips:
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By Accountant A
11th Mar 2019 20:13

Wilson Philips wrote:

Thanks but that doesn’t really answer my question, unless you think that it confirms that such loans will no longer be excepted once interest relief is no longer given by deduction.

Not looked in detail but I thought that is what it means.

Also found this:

https://www.accountingweb.co.uk/any-answers/loans-to-directors-to-financ...

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Replying to Accountant A:
Psycho
By Wilson Philips
11th Mar 2019 20:19

Perfect, thanks!

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Replying to Wilson Philips:
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By Accountant A
11th Mar 2019 21:26

Wilson Philips wrote:

Perfect, thanks!

Glad it helped. I've re-read and am now confused!

Is the end result that the overall tax effect will be symmetrical- the reducing proportion relieved at higher rates being matched by an increase (from nil pre 17/18) in the taxable benefit? Does the employer just return the whole loan as a benefit now and the employee resolves via SA?

Ta

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Replying to Accountant A:
Psycho
By Wilson Philips
11th Mar 2019 21:52

That is certainly how I read both the comments in that thread and section 184. The benefit will be taxable in full but the taxpayer will be entitled to a basic rate credit.

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