# AIB Benefit in Kind



## E.j 79 (9 Mar 2020)

Hi, anyone else have same problem with AIB I am ex staff I have sold my house last year after I separatedI had negative equity of 26k. Trying to get that sorted and AIB staff business keep saying they are still dealing with "benefit in kind".
Thanks


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## Brendan Burgess (9 Mar 2020)

What is the issue? 

Surely if there is negative equity, you just pay it off and that is the end of it? 

Or have they offered you  a deal to write it off? 

I presume that if a bank writes off a debt from an employee, it should be taxable? 

Brendan


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## Jim Stafford (9 Mar 2020)

If an employer writes off a staff loan then then the amount written off is treated as "net pay" and the employer has to "gross" it up to pay over the PAYE/PRSI/USC.    So not only is the bank losing, say €25,000, on a write off, it could potentially have to pay another €25,000 in taxes.

The BIK issue has presented a blockage for many people.

In practice, we find the banks much tougher on their own staff than on third parties when it comes to debt forgiveness.  

We did the first PIA wIth AIB on writing off residual debt on a staff loan.  It was a long process, as the Board of the Revenue Commissioners had to approve (as it was going to create a precedent)  and the Board of AIB also had to approve it.

I understand that AIB are trying to reach agreement with the Revenue to allow "informal" deals with staff members going forward by "ignoring" the BIK tax issues.  Such an agreement may not be possible, and thus staff might have to do PIAs/DSAs.

Believe me, any PIA/DSA involving a write off of bank staff loans will go through a forensic examination by the banks and the Revenue.

As far as E.j 79 is concerned, I imagine that it would be very difficult to obtain a write off on a sum of €26,000.

Jim Stafford


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