# Income Tax (Earnings and Pensions) Act 2003, Section 174: Employment-related loans

Extent: E+W+S+N.I.

(1) For the purposes of this Chapter an employment-related loan is a loan—
(a) made to an employee or a relative of an employee, and
(b) of a class described in subsection (2).
(2) For the purposes of this Chapter the classes of employment-related loan are—
A
A loan made by the employee’s employer.
B
A loan made by a company or partnership over which the employee’s employer had control.
C
A loan made by a company or partnership by which the employer (being a company or partnership) was controlled.
D
A loan made by a company or partnership which was controlled by a person by whom the employer (being a company or partnership) was controlled.
E
A loan made by a person having a material interest in—
(a) a close company which was the employer, had control over the employer or was controlled by the employer, or
(b) a company or partnership controlling that close company.
(3) In this section—
“employee” includes a prospective employee, and
“employer” includes a prospective employer.
(4) References in this section to a loan being made by a person extend to a person who—
(a) assumes the rights and liabilities of the person who originally made the loan, or
(b) arranges, guarantees or in any way facilitates the continuation of a loan already in existence.
(5) A loan is not an employment-related loan if—
(a) it is made by an individual in the normal course of the individual’s domestic, family or personal relationships, or
(b) it is made to a relative of the employee and the employee derives no benefit from it.
(6) For the purposes of this section a person (“X”) is a relative of another (“Y”) if X is—
(a) Y’s spouse or civil partner ,
(b) a parent, child or remoter relation in the direct line either of Y or of Y’s spouse or civil partner ,
(c) a brother or sister of Y or of Y’s spouse or civil partner , or
(d) the spouse or civil partner of a person falling within paragraph (b) or (c).

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Source: https://www.legislation.gov.uk/ukpga/2003/1/section/174 (the official version)
Page: https://openlegislation.uk/income-tax-earnings-and-pensions-act-2003/section-174
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.