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Hi, I have a question re the expensive accommodation charge.
The question as per Kaplan F6 exam kit
“Jo is provided with non-job related accommodation by her employer, which the employer purchased 35 years ago at a cost of £72,000. The property has an annual value of £2,600, and had a market value of £245,000 when first made available to Jo 8 years ago. Jo pays £250 per month to her employer to live in the property”
What is the assessable benefit in 2014/15?
According to the answers, the assessable benefit is £nil as the original cost did not exceed £75,000. However surely the calculation should be based on the MV of £245,000 as the property was provided to the employee more than 6 years after purchasing it (27 years in this case).
Is the answer incorrect? Should it be £2600 – (12 x £250) + ((£245,000 – £75,000) * 3.25%) = £5,125
Many thanks in advance
i did same when i solved the question… but when i reviewed the topic from book i came to know that cost must b higher then 75000 so that it will come in expensive living accommodation and afterwards we have to decide that whether to take cost or the market value for our calculations.
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