The legislation uses annual value to calculate the value of the benefit of being provided with living accommodation (see EIM11431). For living accommodation situated outside the United Kingdom the annual value is determined under Section 110 ITEPA 2003 (see EIM11432) as the annual rent at which it could be let for a year unfurnished on the assumption that:
If the cost of the accommodation exceeds £75,000, then the
amount of the cash equivalent is calculated in accordance with
Section 106 ITEPA 2003 (see
EIM11472). As the annual value is based
on the open market rental, then under ESC A91b the cash equivalent
of the benefit is restricted to step 1 of Section 106.
The question of the period for which living accommodation
has been provided is often an issue for properties outside the
United Kingdom (see
EIM11405 onwards). If the charge is for
a period of less than a year apportion the annual rent on a time
basis (see example
EIM11422).
The onus is on the employer to come up with an estimate of
the market rental of the property. He will normally be able to
obtain an estimate from a local estate agent in the country
concerned.
If you want to check the estimated market rental figure is
reasonable get a full description of the accommodation and locality
(accompanied, where appropriate, by photographs).
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
