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A suit costing 300 was purchased for Bill 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 tax years.
for 13/14
taxable benefit = 20%* 300= 60
14/15
asset MV when gifted = 30suit’s original market value =300
less: benefit assessed = 60 +20so higher of above 220
less price paid by Bill (20)taxable benefit is 200.
this is what I got. but in book it is given 220. how??
No, the benefit assessed at the point the asset is transferred is only 60 so that the tax wdv is 240 at the point of sale. We then compute the benefit on the transfer of the asset where we take the higher of the tax wdv of the asset (240) or the OMV (30), which is clearly 240 and reduce this by the price paid of 20. Hence 240 – 20 = 220 as the benefit in 14/15
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