SE13270 - Termination payments and benefits: valuation of non-cash benefits received on or after 6 April 1998

Paragraph 12 Schedule 11 ICTA 1988 and Section 596B ICTA 1988

This instruction deals only with the valuation of non-cash benefits received on or after 6 April 1998. For the valuation of non-cash benefits received before that date, seeSE13255). To determine when a non-cash benefit is “received” see SE13110.

Finance Act 1998 introduced new rules for valuing non-cash benefits received on or after 6 April 1998. Their value is defined as the “cash equivalent” of the benefit.

Strictly, that “cash equivalent” is the greater of:

• the amount which would be chargeable under Section 19 ICTA 1988 if the benefit were an emolument (known for convenience as its “Section 19” value) and
• its “cash equivalent” as defined in Section 596B ICTA 1988 (see SE13280)

but in practice, the “Section 19 value” only needs to be considered if the benefit consists of the transfer of an asset that has grown in value since being acquired by the person providing it: see example SE13934. In other circumstances, there is no need to calculate the “Section 19” value: use the “cash equivalent” as defined in Section 596B ICTA 1988. For details of this see SE13280.

If the recipient makes good some of the cost of the benefit, this sum is deducted in arriving at the “cash equivalent”.

Note: if the non-cash benefits have been previously charged to tax in some way, they cannot be charged again. See SE13290