PT18 - Taxable Benefits - Living Accommodation

Question 1

Job-related accommodation is …

Answer 1

a tax-free benefit.

This is where the accommodation is:
a. necessary for the job;
b. provided for the better performance of the job and customary; or
c. provided because of a threat to the employee’s security.

Question 2

The benefit for rented accommodation is …

Answer 2

the higher of rents paid by the employer and the
annual value.

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.

Question 3

If the lease premium is treated as rent paid by the employer, it is calculated as:

Answer 3

Lease premium/Length of lease + Actual rent paid

Question 4

If the employer owns the property, the benefit is….

Answer 4

the annual value.

Question 5

Additional yearly rent is calculated if the property cost more than….

Answer 5

£75,000,

The additional yearly rent being:
(Cost − £75,000) × ORI at start of year

(cost is original cost + improvements)

Question 6

If there were more than ______ years between the purchase of the property and the employee moving in and the property cost over £75k

Answer 6

Six

the market value of the property at the date the employee moved in is substituted for cost in the formula.

(MV − £75,000) × ORI at start of year

Question 7

Treatment of household expenses paid by the employer:

Answer 7

also a benefit for the employee.

If the employee is in job-related accommodation, the benefit is limited to 10% of the other earnings from this employment for the year

The payment by the employer of council tax or water charges in respect of job-related accommodation is an exempt benefit