Income Tax (Earnings and Pensions) Act 2003 section 289

Relief for certain bridging loans not qualifying for exemption under section 288

Section 289 provides partial relief for employment-related bridging loans that fail to qualify for full exemption under section 288 because they were not repaid within the required timeframe.

• The section applies where a bridging loan qualifies as a removal benefit and meets the unused removal benefit exemption condition, but is not repaid before the end of the exempted loan discharge period
• Where these conditions are met, the loan is treated for taxable benefit purposes as though it was made the day after the exempted loan discharge period ended, reducing the period over which a benefit-in-kind charge arises
• This deemed later start date does not affect certain other loan provisions, including the exceptions for loans on ordinary commercial terms, fixed-rate loans, the £10,000 threshold, the double-charge exclusion, and the exclusion of charges after the employee's death
• Tax payable for a tax year ending before the limitation day may be calculated on a provisional basis, assuming the relief will not apply because the unused removal benefit exemption condition will not be met

---