Section 188 | Loan released or written off: amount treated as earnings

(1)If—

(a)the whole or part of an employment-related loan is released or written off in a tax year, and

(b)at the time when it is released or written off the employee holds the employment in relation to which the loan is an employment-related loan (“employment E”),

the amount released or written off is to be treated as earnings from the employment for that year.

(2)But if the employment has terminated or become lower-paid employment as a minister of religion and there was a time when—^F1

(a)the whole or part of the loan was outstanding,

(b)the employee held the employment, and

(c)it was not lower-paid employment as a minister of religion,^F1

subsection (1) applies as if the employment had not terminated or become lower-paid employment as a minister of religion .

(3)Where subsection (2) applies, any loan which replaces directly or indirectly the employment-related loan is to be treated as an employment-related loan in relation to employment E if—

(a)it would, if employment E had not terminated or become lower-paid employment as a minister of religion, have been an employment-related loan in relation to employment E, and^F2

(b)it is not an employment-related loan in relation to other employment.

(4)This section is subject to section 189 (exception where double charge).