BENEFICIAL LOANS- OFFICIAL RATE OF INTEREST
From 6 April 2007 the official rate of interest for calculating the cash equivalent of beneficial loans will change from 5.00% to 6.25%.The official rate of interest is set by The Treasury, and where possible changes are made from the start of the tax year because this makes calculation easier. However, changes to the official rate may also occur during the tax year, for example when commercial rates of interest change, and when this happens The Treasury will publish an average official rate for the year, which should be used where:
- A loan is outstanding throughout a tax year and
- The normal averaging method of calculation is used
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