PD Curtis v HMRC

In PD Curtis v HMRC (TC03303 – 5 February 2014) the tribunal had to decide whether Mr Curtis was liable to income tax on the benefit of a mortgage loan provided by a subsidiary of his employer under the beneficial loans provisions (ITEPA 2003 s 175).

Mr Curtis worked for RBS; he was also a longstanding customer of NatWest which was taken over by RBS before 2008 when he first took a loan from NatWest. The interest rate was variable and was 0.44% above the bank’s base rate. During the tax year at issue (2009-10) NatWest’s base rate was 0.5% and so Mr Curtis paid interest at 0.94%.

The loans were clearly ‘employment-related loans’. The issue was therefore whether they were ‘taxable cheap loans’ ie the interest paid on the loans was less than the official rate (as fixed by the Treasury). As Mr Curtis paid...