EIM11442 - Living accommodation: Section 105 ITEPA 2003 benefit on property in the United Kingdom: example
Section 105 ITEPA 2003
On 1 February 2000 an employer acquired living accommodation for
£65,000 that an employee occupied from that date at a rent of
£300 a year. The gross rating value for the property is
£900. No improvements were made to the property before 6 April
2003.
The calculation of the amount of earnings for 2003/04 is:
|
£ |
|
| annual value | 900 |
| less rent paid by employee | 300 |
| chargeable earnings | 600 |
If instead of acquiring the property the employer had rented it for £3,000 a year from 1 February 2000, the amount of earnings for 2003/04 would be:
|
£ | ||
| rent paid by employer |
3,000 | (Greater than its annual value) |
| less rent paid by employee |
300 | |
| chargeable earnings |
2,700 |
For examples of the Section 105 charge on properties outside the United Kingdom see example EIM11421 and example EIM11422).
