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brought in.162 If there are two or more employment-related loans they are treated separately,163 a matter of importance where different rates of interest are paid on different loans. It will be seen that the reduction in the cash equivalent is only due if the interest is paid; where an assessment is made on the basis that interest has not been paid and if it is later, there is right to claim relief.164 |
The amount of interest due at the official rate is calculated first by taking a simple average of the loan outstanding at the beginning and end of the tax year, multiplying this by the number of months of the loan in the year and divided by 12, and then applying the official rate.165 However, either the taxpayer or the Revenue may elect that the interest be calculated on a day-to-day basis—a matter of importance where the amount of the loan fluctuates during the year.166 |
17A.4.3.5 Replacement Loans |
Further provisions deal with the calculation of the interest where an employment-related loan is replaced, directly or indirectly (a) by a further employment-related loan, or (b) by a non-employment-related loan which, in turn, is, in the same year of assessment or within 40 days thereafter, replaced, directly or indirectly, by a further employment-related loan. In these circumstances the rules are applied as if the replacement loan or loans were the same as the first employment-related loan.168 |