An employee can obtain a benefit by reason of his or her
employment when provided with a cheap or interest-free loan. The
benefit is the difference between the interest the employee pays,
if any, and the commercial rate the employee would have to pay on a
loan obtained elsewhere. Such loans are called beneficial loans.
An employee can also benefit if a loan made by reason of the employment is released or written off. He or she is then no longer obliged to repay the amount that was lent.
There are special rules relating to the taxation of these benefits.
The relevant guidance is:
If a beneficial loan is made to enable an employee to acquire shares in a company you will need to consult the guidance in the Share Scheme Manual.