asked the Minister for Finance whether the 12 per cent rate set in 1982 is still appropriate for assessing benefit in kind from preferential loans; and if he will make a statement on the matter.
Written Answers. - Benefit-in-kind Assessment.
60.
The 12 per cent specified rate mentioned by the Deputy is used for assessing the benefit-in-kind from both mortgage and non-mortgage loans given by some employers to their employees at preferential rates.
Since the Finance Act, 1982, this rate has been lower than commercial rates charged for non-mortgage personal finance such as term loans. That is still the position. On the other hand while commercial mortgage rates have from time to time been above 12 per cent since 1982, they have also stood at less than 12 per cent, as they do at present.
I should point out that in calculating the amount of interest paid for the purposes of mortgage interest tax relief the same rate of interest is used (subject to the normal conditions attaching to the relief) as applies in calculating the benefit-in-kind.
In the circumstances I am not convinced that a change in the specified rate would be warranted. I am, however, considering the matter at present.