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The context is “plc provided Joe with a home entertainment system for his personal use costing £4400 on 6 April 2014./ The company gave the home entertainment system to Joe for free, when he left the company on 31December 2014, although its market value at that time was £3860.”
The result for ” home entertainment system-acquisition” is £3860, but I just wonder the reason. In my view, it means gift of employer’s asset, so MV first provided less benefit charged before is the correct formula we should use for calculation.Look at OT notes chapter 9, page 62, section (d) Gifts of assets and related example – we take the higher of the OMV of the asset or its tax WDV – less any price paid.
Sorry I prepare the exam not by the book you referred to. I misunderstood that £4400 is MV first provided, but now I learn that it is an irrelevant cobdition on the question ?gift?,am I right?
Sorry I prepare the exam not by the book you referred to. I misunderstood that £4400 is MV first provided, but now I learn that it is an irrelevant cobdition on the question(gift) ,am I right?
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