Say someone has a £10,000 loan over the 2019/20 tax year. They pay no interest, BiK of £250. They pay £100, BiK of £150. They pay £250, BiK nil.
Say they pay £300, obviously BiK nil, but is the £50 'lost'? Presumably ITA 07 s383 isn't in play, even if the money was used to, say, buy shares, as it's not a third party loan, and the loan has to be at a reasonable commercial rate, which I imagine in the case of a loan to an employee HMRC would say is the ORoI!
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If the loan is used for a qualifying purpose I would claim the interest paid in full - including in your example the £50. 3% seems to me to be a reasonable commercial rate for an unsecured loan.
Well, if you think about it, if interest was charged at a non-commercial rate the loan is likely to involve a connected party. The legislation therefore implicitly allows relief for such loans providing that you're not stupid with the interest rate.