Hello.
- Jo is provided with 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 for Jo in the tax year 2018/19?
1. The answer is Nil.
2. In answer states that,"The original cost did not exceed £75,000, therefore it is not considered to be an expensive accommodation."
3.Why the calculation is based on original cost £72,000 and not 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).
Thanks in advance.
Ask the Tutor ACCA TX-UK
Property Income
The answer is in the OT Notes - look at Chapter 9 Section 7 on Living Accommodation
I did read and watched your lectures but still has some difficulties to understand this rule
The note I referred you to in the OT Notes says:
"if the cost is less than £75,000 there is no expensive accommodation benefit irrespective of the market value when the employee first
occupied the property."
I regret I cannot make this point any clearer - in the question the cost is less than £75,000 therefore IRRESPECTIVE of the market value when the employee first occupied the property there is NO expensive accommodation benefit
Hi,
I was reading my Kaplan Study Text and came across this term Residential Property & Non Residential Property in Property Income chapter and got confused as to what this actually means and where does it apply. I would be really thankful if you could guide me through this.
Residential property is where people live and non residential property is commercial property
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