Chapter 18 - Living Accommodation

Question 1

Define ‘Job-Related’ accommodation

Answer 1

That which is necessary for the proper performance of the job

This also includes situations where accommodation is provided for the ‘better performance’ of an employee’s duties

Question 2

What cash equivalent of the accommodation is the higher of what?

Answer 2

1. rents paid by the employer for use of the property
2. the annual value of the property

Question 3

True or false

Where a lease premium is paid for a lease of ten years or less, the amount of the premium will be treated as rent paid by the employer

Answer 3

True

Question 4

How do you calculate the annual rent paid by the employer?

Answer 4

less premium / length of lease + actual rent paid

Question 5

True or false

Where the employer owns the accommodation & it cost not more than £75k, the benefit is equal to the annual value

Answer 5

True

Question 6

What is ‘additional yearly rent’ added to?

Answer 6

The annual value to give the total benefit

Question 7

What is the formula for calculating additional yearly rent if the cost is > £75k?

Answer 7

(cost - 75,000) x ORI at start of the year

e.g (160,000 - 75,000_ x 2.25%

Question 8

What is the 6 year rule?

Answer 8

The 6 year rule applies when a property bought by an employer is made available for use by the employee more than 6 years after it had been first acquired

Question 9

How do you apply the 6 year rule?

Answer 9

The charge will be based on the market value of the house on the date the property was made available to the employee