Tx notes fa22 Final

 
Example 2
 
 
Jones, a sales manager, occupies a flat owned by his employer. Its annual value is £4,000 and Jones 
pays his employer £500 p.a. for use of the flat. The flat was originally purchased in 2009 for 
£100,000 and Jones moved into the property in 2021 when the property was worth £120,000.
Calculate the total benefit assessable on Jones for 2022/23 assuming an o
ffi
cial rate of 
interest of 2% 

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8.4. Expenses connected with living accommodation 
(a)
Expenses such as lighting and heating are taxable on the employee if they are paid by the 
employer.
(b)
When the accommodation is job related, the taxable limit is 10% of other employment income. 
In addition the payment of council tax by the employer is an exempt benefit if the 
accommodation is job related.
8.5. Use of assets 
Amount assessed is the higher of:
‣
20% 
×
market value of the asset when first provided
‣
rental paid by employer (if asset is rented)
8.6. Gifts of assets 
(a)
If an employee is gifted a new asset, he is taxed on the cost of the asset.
(b)
If an employee is gifted an asset that has previously been used he is taxed on the higher of:
‣
the market value of the asset when given to him.
‣
the market value of the asset when first made available to the employee less the benefit 
assessed on the employee during the time he had the use of it.
(c)
The above rule does not apply to the gift of a motor car or van, where the benefit is simply the 
market value of the asset when gifted.