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Hi
I urgently need to understand something for the Renner question:
Firstly, The question states the official rate of interest is 3%, however in the beneficial loan working in working 2 it states 2.5% – 2%. Where is the 2.5% derived from?
Secondly, when calculating the private benefit for the use of the yacht in part a of working 2, it states 20% x 42,000 x 2/52. Is the 20% in this working referring to his share of the ownership of the company or is it referring to the basic rate tax band?
Thanks
Firstly 2.5% is the official rate of interest given on your rates and allowances tables and used in the examples in the study notes. Unfortunately 3% is a typo error and should not be there – I though that it had been removed so apologies for that
Secondly – you should know that the generic rule for dealing with “other” assets made available for private use is 20% pa of the market value when first made available for private use as demonstrated in the notes and lectures (chapter 9 page 57) – “other” assets is simply any asset other than those that have their own specific rule (such as living accommodation, cars and vans)
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