Chapter 4 - Living Accommodation

Question 1

Introduction

Answer 1

If accommodation is owned or rented by the employer and is made available to an employee, there’s a benefit

Question 2

Job Related

Answer 2

No benefit if the accom is provided for performance of duties. It is job related if the accom is:

• necessary for the performance of the job ie caretakers
• provided for the better performance of the job and customary; or
• provided because of a threat to employee safety

Question 3

Rented Accommodation

Answer 3

Benefit is higher of the rent paid by the employer and the annual value of the property.
Then deduct any employee contributions to get the benefit.
Pro rate for non-availability

Question 4

Lease

Answer 4

Where a lease premium is paid for a 10 year or less lease, the premium is treated as rent. Annual rent will be calculated as:
Lease premium/length of lease + actual rent paid

Question 5

Employer Owned

Answer 5

If employer owns the property, the benefit is the annual value. Additional yearly rent is calculated is the property cost more than £75k:
(Cost - £75,000) x ORI at start of the year
Cost = original cost + improvements made before the tax year in question.
Employer contributions are deducted as well

Question 6

6 Year Rule

Answer 6

If a property was bought by an employer and made available more than 6 years after purchase, the additional yearly rental will be based on the MV of the house on the date it is made available.

Question 7

Household Expenses

Answer 7

Any bills paid by the employer are a separate benefit.