Taxes Consolidation Act 1997 section 811B

Tax treatment of loans from employee benefit schemes

Section 811B is an anti-avoidance measure that counteracts schemes whereby employers place funds in trusts or other arrangements (generally offshore) and, under those schemes, provide loans, benefits or assets to directors, employees or connected persons, with loans typically rolled over indefinitely and never repaid.

• Where an employee, former employee or connected person receives a payment, loan, benefit or asset from a benefit scheme funded by the employer or former employer, the value is deemed to be income chargeable to income tax under Case IV of Schedule D, and also to USC.
• Where such a payment, benefit or asset is provided to an individual before that individual becomes an employee, the charge arises in the year in which the employment commences; however, no Irish charge applies if the amount is already taxable in a tax treaty country.
• If a loan taxed under this section is subsequently repaid, or an asset or benefit is returned or ceases, relief is available by way of offset or repayment equal to the difference between the tax originally paid and the tax that would have been payable under the normal benefit-in-kind rules.
• The section does not apply to Revenue-approved schemes such as Approved Profit Sharing Schemes, Employee Share Ownership Trusts or occupational pension schemes, nor does it apply where the normal benefit-in-kind charging provisions already apply.