A suit costing 300 was purchased for Bill's use by his employer on 6 April 2013. On 6 august 2014,the suit is purchased by bill for 20, when the market value was 30. Bill earns 30000 p.a%. calculate the amount taxable on bill for each of the years.
13/14 annual value= 20%*300=60
14/15 annual value=20%*300*4/12=20
suit's current market value : 30
suit's original market value :300
less: annual value :60+20
price paid by bill 20
taxable benefit =200
sir, are my procedures and answer correct?
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gift of assets
sir in above question if I am asked to calculate value of benefit what should I do? what actually value of benefit means? Is value of benefit added with employment income?
Yes your calculations appear correct and if asked to calculate the taxable benefit for 2014/15 it would be £220 (the 20 and 200 figures you have computed).
If you were preparing the income tax computation for 2014/15 then you would add the benefit to the annual salary to determine the employment income assessment.
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