SE13330 - Termination payments and benefits: Section 148 ICTA 1988: benefit of living accommodation received on or after 6 April 1998: “cash equivalent”

Paragraph 12(2)(b) Schedule 11 and Section 596B(1)(b)-(8) ICTA 1988

Follow these steps to calculate the “cash equivalent” of living accommodation under Section 148 ICTA 1988:

First calculate the “cost of providing the accommodation”. This means:

• the cost of acquiring the “estate or interest” (see SE13331) in the property held by a “relevant person” (see SE13331) (for example, the cost of the freehold or lease) plus
• costs incurred by the “relevant person” (see SE13331) before the tax year of the benefit on improvements to the property less
• any reimbursements of that acquisition or improvement costs which the receiver of the benefit has made, less
• the cost to the receiver of the benefit of the grant of any tenancy of the property

There is an example at SE14000

Second decide if that “cost of providing the accommodation” is £75,000 or less.

• If it is £75,000 or less, see SE13338
• If it is more than £75,000, you must add a sum to the charge calculated under SE13338 above to find the “cash equivalent” of the benefit. See SE13340 for details.