Tax treatment on Loan from Employer

F

footie

Guest
My employer gives an interest free loan for the purchase of a house (PPR)
I am well below the treshhold for TRS so I have to claim the interest revenue charge directly from them.

My understanding is as follows
Amount outstanding at 1/1 10,000
Interest Rate (as interest free loan revenue assume interest rate) 5%

BIK
10,000 @ 5% =
BIK - 500 (Interest paid) I pay tax and PRSI on this

Tax Relief
As I don't claim TRS on this I have to claim relief on the interest paid directly from Revenue. This is normally given as a tax credit.

Credit on SRCOP cert
500*20% = 100

Is this correct?
 
footie said:
My employer gives an interest free loan for the purchase of a house (PPR)
I am well below the treshhold for TRS so I have to claim the interest revenue charge directly from them.

My understanding is as follows
Amount outstanding at 1/1 10,000
Interest Rate (as interest free loan revenue assume interest rate) 5%

BIK
10,000 @ 5% =
BIK - 500 (Interest paid) I pay tax and PRSI on this

Tax Relief
As I don't claim TRS on this I have to claim relief on the interest paid directly from Revenue. This is normally given as a tax credit.

Credit on SRCOP cert
500*20% = 100

Is this correct?
Click to expand...

Spot on. The reason you don't claim TRS is it is an unsecured loan i.e. not a mortgage. I'm not sure Revenue will allow this credit on your Tax credit certificate during the year but it can definitely be claimed at end of tax year.
 
Clubman

Thanks for the link but it does not explain how I can claim back the interest through tax credits.

I am currently having problems explaining this to revenue

Can any one provide a link that will explain this.
 
footie said:
Clubman

Thanks for the link but it does not explain how I can claim back the interest through tax credits.

I am currently having problems explaining this to revenue

Can any one provide a link that will explain this.
Click to expand...

I would fill in a Form 12 for the year in question after the year end. Section 39 on page 10 of the 2007 form 12 is where this figure should be entered. It specifically mentions it there "Include deemed interest"
[broken link removed]
 
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