Section 188 — Income Tax (Earnings and Pensions) Act 2003: Loan released or written off: amount treated as earnings

Loan released or written off: amount treated as earnings 188 1 If—

a the whole or part of an employment-related loan is released or written off in a tax year, and b at the time when it is released or written off the employee holds the employment in relation to which the loan is an employment-related loan (“employment E”), the amount released or written off is to be treated as earnings from the employment for that year.

2 But if the employment has terminated or become lower-paid employment as a minister of religion and there was a time when—

a the whole or part of the loan was outstanding, b the employee held the employment, and c it was not lower-paid employment as a minister of religion , subsection (1) applies as if the employment had not terminated or become lower-paid employment as a minister of religion .

3 Where subsection (2) applies, any loan which replaces directly or indirectly the employment-related loan is to be treated as an employment-related loan in relation to employment E if—

a it would, if employment E had not terminated or become lower-paid employment as a minister of religion , have been an employment-related loan in relation to employment E, and b it is not an employment-related loan in relation to other employment.

4 This section is subject to section 189 (exception where double charge).