S.L. 123.55 Art. 27Annual value of beneficial loan arrangements.

The annual value of the benefit referred to in rule 26 is the interest that would be payable on the loan for the year in question if it were chargeable at the benchmark rate reduced by the interest paid on that loan by the beneficiary during that year: Provided that in the case of a loan to which paragraph (i) of the proviso to rule 26(2)(c) applies, the annual value shall be reduced by the in-house benefit reduction:

Provided also that the value of a loan by a company to a shareholder who holds more than 25% of the ordinary share capital and voting rights in that company shall be zero.