20 |
15A.4.2 Additional Charge Using Calculation under ITEPA Section 106 TA 1988, Section 146 |
If X is taxable under TA 1988, section 145 and the accommodation costs more than £75,000 to provide, an additional charge on the excess over £75,000 is calculated under section 106 (ex TA 1988, section 146. X is treated as receiving a loan of the amount by which the cost exceeds £75,000 and a percentage of that loan as income in that year. The figure of £75,000 has not been changed since the section was introduced in 1983.75 |
15A.4.2.1 Cost |
For sections 105 and 106 the cost of providing the accommodation is the purchase price plus improvement expenditure, less any amount paid by X as reimbursement for the expenditure or as consideration for the tenancy.76 If, when X first occupies the accommodation, the person providing the accommodation has held an estate or interest in the property for the previous six years, the market value at the date on which X first occupies the property is substituted for the purchase price.77 Market value is defined.78 |
Employees are taxed on the additional value to them of the accommodation, which is: |
(cost of providing accommodation − £75,000) × [appropriate %] − excess rent |
‘Excess rent’ is the amount by which any rent paid by the employee exceeds the value to the employee of the accommodation. |