BIK on preferential mortgages (unusual situation)

[jericho]

Example: Working for a bank, and getting a preferential fixed rate on a mortgage, being subject to BIK of the difference between the preferential rate (3%) and the Revenue specified rate (3.5% at the moment). Now, if said bank is taken over, by an organisation that does not provide retail banking in this country but has undertaken to honour committments. So, you now have, lets say, a tracker rate mortgage, what, say 4.15%. New organisation has agreed to "cover" the difference between the 3%, and the new rate. But surely this can only be done as an extra payment to the employee, and not as BIK? And if so, does it cost the employee more in regular PAYE than it would have in terms of BIK? Essentially, is real income taxed in the same way as BIK?

 

[bazermc]

Essentially, is real income taxed in the same way as BIK?

Yes, real income is taxed the exact same way as a BIK. A BIK is deemed to be cash and taxed accordingly, so its just the reverse in this case.

The extra payment to cover said mortgage will be just extra taxable income