Page 96 - P6 Slide Taxation - Lecture Day 3 - VAT Part 1

Income from Employment

Fringe

• Low – interest debts

• A taxable benefit arises when an employee is

offered a free interest loan by the employer for

interest that is lower than the official rate.

• Official rate of interest =Repurchase rate + 100

basis points.

• Cash equivalent=Interest on the loan-official rate

of interest.

• If the employee uses the loan in the production of

income the interest is deductable.

96