Employment Income - Assets & Loans

Question 1

If an employee is allowed to use an asset owned by their employer for private use they will be assessed on…

Answer 1

The higher of:

• Rental paid by employer
• 20% of value when first made available to employee

Question 2

If an employer gifts an asset to an employee that the employee has already used, how will the employee be assessed?

Answer 2

The higher of:

• Market value when given
• Original value when first used less values already assessed.

Question 3

If an employer gifts an employe a computer, what will they be assessed on?

Answer 3

Market value of the computer

Question 4

If an employer buys a new asset, and immediately gifts it to an employee, how will the employee be assessed?

Answer 4

The cost of providing the asset

Question 5

What is a beneficial loan?

Answer 5

A loan made by an employer to an employee with no interest rate or an interest rate lower than commercially available.

Question 6

What is the benefit on a beneficial loan?

Answer 6

The difference between the interest paid by the employee and the interest they SHOULD have paid at a commercial interest rate.

Question 7

Which 2 methods can be used to calculate the interest that SHOULD have been paid on a beneficial loan?

Answer 7

• The strict method

- The average method

Question 8

If the total of all loans provided to an employee is below £10,000 how will they be assessed?

Answer 8

Exempt - no taxable benefit. However if the £10,000 limit is breached, the whole value is taxable, not just the excess.

Question 9

If all loans (total less than £10,000) are written off by an employer, what is the employee assessed on?

Answer 9

The full value of the loans. No £10,000 limit applies.