½Û×ÓÊÓƵ

Valuing capital payments from 2017/18

Valuing capital payments from 2017/18—overview

Where a capital payment is made by way of loan or anything other than an outright payment of money, its value is equal to the value of the benefit conferred¹.

The most common benefits that give rise to capital payments, according to HMRC², are:

1. Ìý

   •ÌýÌýÌýÌý interest free or low interest loans

2. Ìý

   •ÌýÌýÌýÌý rent free or low rent occupation of property

From 2017/18 onwards, statutory valuation rules apply to determine the value of these benefits, as well as the benefit of making a chattel available for a beneficiary's use³.

These are the same rules that apply for valuation purposes for the transfer of assets abroad provisions⁴ (see I5.1221).

Valuing capital payments from 2017/18—beneficial loans

The benefit each tax year for someone receiving a loan from a settlement is the amount of loan outstanding at the official rate of interest⁵, less any interest actually paid by the beneficiary