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Loans: Interest Rates

Volume 488: debated on Wednesday 25 February 2009

To ask the Chancellor of the Exchequer what interest rate is used to assess the taxable benefit arising on beneficial loans; and whether this rate is changed in line with the Bank of England base rate. (258763)

The official rate of interest used to assess the taxable benefit arising on beneficial loans has been reduced from 6.25 per cent. to 4.75 per cent. with effect from 1 March 2009. The rate is set by reference to prevailing average bank and building society mortgage rates.