EIM13280 - Termination payments and benefits:
valuation of non- cash benefits received after 6 April 1998: usual
application of cash equivalent for Section 401 ITEPA 2003
purposes
Section 415(2) to (7) ITEPA 2003
EIM13270 explained that in order to find the value of a non-cash
benefit received on or after 6 April 1998, you normally calculate
its cash equivalent following the definition in the benefits code.
That definition is:
- for living accommodation, the cash
equivalent is defined in Section 415(7) ITEPA 2003, see
EIM13330 for details
- for all other benefits, the cash
equivalent of the benefit is defined in Section 415(2)(b) ITEPA
2003. It is found by:
- first identifying where the type of benefit being
provided is dealt with in the benefits code (see
EIM21006). For example, where the
benefit provided is the use of a car, the rules in Part 3 Chapter 2
ITEPA 2003 are the appropriate ones to use because they deal with
the benefit of cars made available for private use.
EIM13310 lists various benefits and the
relevant instructions for finding their cash equivalents.
- then follow the rules that establish what the cash
equivalent for that benefit is in that Chapter. EIM13300 below
gives more details.
Notes
When applying the benefits code for this purpose:
- treat any reference to employee in the
code as a reference to the person taxable under Section 401 ITEPA
2003 or to any other person receiving the benefit, as
appropriate
- treat any reference to employer in the
code as including a reference to an ex-employer
- remember that Section 401 ITEPA 2003
applies to excluded employments (see
EIM20007).
