Income Tax (Trading and Other Income) Act 2005 section 23E

Tax treatment of relevant benefits

Section 23E sets out how relevant benefits received by a trader (or persons connected with the trader) are treated for income tax purposes, including how the taxable amount is calculated.

• The relevant benefit amount is taxed as trading profits in the year the benefit arises, or in the year the trade ceased if that was earlier
• For a straightforward payment (not a loan), the taxable amount equals the payment itself
• For a loan, the taxable amount equals the principal amount lent
• For any other type of benefit, the taxable amount is the higher of its market value or the cost of providing it