Beneficial loans: the
official rate of interest
The official rate of interest is set by Treasury regulations. Where possible changes are made from the start of a tax year, because this makes calculation easier.
Sometimes it is necessary to change the official rate during a tax year. If so the Treasury publishes 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.
The normal averaging method is described at EIM26210.
The official rate is currently 6.25% and this is also the average rate.
Foreign currency loans
For information on loans made in a currency outside the United Kingdom see EIM26105.
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