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sir i have not understand the answer .
The question says,what are the taxable benefits for john in respect of the computer for the tax year 2015/16 ??
I knew that when an asset is first provided to an employee and then subsequently gifted ,the taxable benefit will b higher of ..
the MV when gifted less price paid by employee and MV when 1st provided less benefits already taxed for use of asset less price paid by employee.
But in the answer they add 720 to the result derived from the rule i mentioned above.Why they have done this ??
I thought the ans should be $2580 only.You will have to give me more information as I do not have the BPP kit. From what you are saying an asset made available for private use has now been transferred to the employee, hence the calculations you quote. When was the asset transferred – as if it was part way through the tax year there would be a time apportioned annual benefit up to the date of transfer to add in as well. Send me the details if still in doubt
John is employed by Z plc at a salary of 35000 a year.He was provided with a computer for private use on 6 Nov ,2015.The MV of the computer when first provided to an employee for private use was 3600 and the computer had a market vakue of 2000 when first provided to john for private use .Z plc gave the computer to john on 5 april ,2016 when it had a MV of 1000.
What are the taxable total benefits for John in respect of the computer for the tax year 2015/2016 ??Ans :
Use 3600 x 20% = 720
Gift current MV 1000
or ,original vakue 3600
Less : 14/15 .720 x 5/12 (300)
15/16 (720)2580
The greater ammount is taken 2580
Total benefits 15/16 (720+2580) = 3300why the add up 720 in calculating total benefits ??
I presume from the answer that the computer was actually made available in 2014 and based on 3,600 the annual benefit charge would be 720 (20%). As the computer was then transferred to employee at the end of the 2015/16 tax year the total benefit for the year would be made up of the annual 720 charge as John has had the use of a company owned asset for the full tax year (as I suggested to you in previous reply), plus the benefit on the transfer of the asset (2,580) being the tax wdv at 5 April 2016 (3,600 – (300 + 720)). Hope this explains
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