If an employer makes a payment to an employee to compensate for
the fact that the employee's house has fallen in value, or to make
up a shortfall where the house is sold for less than the bridging
loan outstanding on it, there is
no exemption. The payment is taxable in full.
However see
EIM00750 for the exceptional
circumstances in Hochstrasser v Mayes (38TC673).
If an employer lends an employee money to cover a shortfall,
there is a tax charge under Part 3 Chapter 7 ITEPA 2003.
If an employer provides a bridging loan and waives part of it
because the selling price of an employee's property is less than
the amount outstanding the waiver is charged to tax under Section
188(1) ITEPA 2003 (see
EIM21741 onwards).
