Section 742C — Income Tax Act 2007: Value of benefit provided by a payment by way of loan

Value of benefit provided by a payment by way of loan 742C 1 The value of the benefit provided to a person (P) by a payment by way of loan to P is, for each tax year in which the loan is outstanding, the amount (if any) by which—

a the amount of interest that would have been payable in that year on the loan if interest had been payable on the loan at the official rate, exceeds b the amount of interest (if any) actually paid by P in that year on the loan.

2 In this section and section 742D the “ official rate ”, in relation to interest, means the rate applicable from time to time under section 178 of the Finance Act 1989 for the purposes of Chapter 7 of Part 3 of ITEPA 2003.