Chapter EIM45225
| Published date | 22 May 2014 |
| Record Number | EIM45225 |
| Court | HM Revenue & Customs |
| Issuer | HM Revenue & Customs |
Conditions if the transaction is not a loan
‘Comparable with A’s status’
‘Employees of B’
Example: substantial proportion of B’s employees
Example: substantial proportion of those employees of B whose status as employees of B is comparable with A’s status as an employee of B
Section 554G (exclusions: employee benefit packages) lays down specific conditions to be met if the transaction is not a loan.
On Section 554G generally, see EIM45215.
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Conditions if the transaction is not a loanTwo conditions must be met if the relevant step is not the payment of a sum of money by way of loan to A. These two conditions are bulleted below.
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The transaction with A is part of a package of benefits which is available to:
- a substantial proportion of B’s employees, or
- a substantial proportion of those employees of B whose status as employees of B is comparable with A’s status as an employee of B.
In practice, ‘a substantial proportion’ will normally mean at least 50%. See EIM26160 on ‘a substantial proportion’ in Section 176 ITEPA 2003.
- Under the package of benefits, the person taking the step (P) offers similar transactions on sufficiently generous terms to other employees besides A. That is, the terms are such that substantially all of the employees of B to whom the package is available can take advantage of what is offered (if they want to). A transaction is ‘similar’ if it is of the same type as, or a similar type to, P’s transaction with A.
For the purposes of Section 554G, ‘A’ includes persons linked with A unless specifically noted. See EIM45860.
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‘Comparable with A’s status’In deciding whether employees are comparable in status, you take into account matters such as:
- levels of seniority,
- types of duties, and
- levels of remuneration.
‘Comparable with A’s status’ means comparable with the status of A alone not comparable with the status of any person linked with A.
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‘Employees of B’If the relevant step is not the payment of a sum of money by way of loan to A, ‘employees of B’ means employees of B whose duties of employment are performed in the United Kingdom.
If a duty is performed outside the United Kingdom, and its performance is merely incidental to the performance of duties in the United Kingdom, then the duty is treated as performed in the United Kingdom.
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Example: substantial proportion of B’s employeesEmployer B has a number of branches spread across the United...
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