17Exempt loan benefits

#### 17 Exempt loan benefits (1) Where: (a) a loan is made by a person who carries on a business that consists of or includes making loans to members of the public; and (b) the rate of interest payable in respect of the loan: (i) is specified in a document in existence at the time the loan is made; (ii) is not less than the rate of interest in respect of a similar arm’s length loan made by the person, at or about that time, to a member of the public in the ordinary course of carrying on that business; and (iii) cannot be varied; the making of the loan is an exempt benefit. (2) Where: (a) a loan is made by a person who carries on a business that consists of or includes making loans to members of the public; and (b) the rate of interest from time to time payable in respect of the loan in respect of a year of tax is not less than the rate of interest applicable at the time concerned in respect of a similar arm’s length loan made by the person, at or about the time the loan referred to in paragraph (a) is made, to a member of the public in the ordinary course of carrying on that business; the making of the loan is an exempt benefit in relation to that year of tax. (3) Where: (a) a loan consists of an advance by an employer to a current employee of the employer in respect of his or her employment; (b) the sole purpose of the making of the loan is to enable the employee to meet expenses incurred by the employee: (i) in the course of performing the duties of that employment; and (ii) not later than 6 months after the loan is made; (c) the amount of the loan does not substantially exceed the amount of those expenses that could reasonably be expected to be incurred by the employee; and (d) the employee is required: (i) to account to the employer, not later than 6 months after the loan is made, for expenses met from the loan; and (ii) to repay (whether by set‑off or otherwise) any amount not so accounted for; the making of the loan is an exempt benefit. (4) Where: (a) the making of a loan consisting of an advance by an employer to an employee of the employer constitutes a benefit in respect of the employment of the employee in respect of a year of tax (in this subsection called the current year of tax); (b) the sole purpose of the making of the loan is to enable the employee to pay any of the following amounts payable by the employee in respect of accommodation: (i) a rental bond; (ii) a security deposit in respect of electricity, gas or telephone services; (iii) any similar amount; (c) the employee is required to repay (whether by set‑off or otherwise) the loan not later than 12 months after the loan is made; (d) any of the following benefits is provided in, or in respect of, any year of tax to the employee in respect of that employment: (i) an expense payment benefit where the recipients expenditure is in respect of a lease or licence in respect of that accommodation; (ii) a housing benefit where the housing right is in respect of that accommodation; (iii) a residual benefit where the recipients benefit is constituted by the subsistence of a lease or licence in respect of that accommodation; and (e) either of the following subparagraphs apply: (i) by virtue of section 21 or subsection 47(5), the benefit referred to in paragraph (d) is an exempt benefit in relation to the year of tax referred to in that paragraph; (ii) the benefit referred to in paragraph (d) is a fringe benefit in relation to the year of tax referred to in that paragraph and, under section 61C, the taxable value of the fringe benefit is reduced by the extent to which that taxable value is attributable to the subsistence of a lease or licence in respect of the accommodation during a particular period in that year of tax; the making of the loan is an exempt benefit in relation to the current year of tax.