| Benefits Code I and Exemptions and Exclusions |
21 |
The percentage is the official rate of interest set for the purpose of calculating the benefit of low-interest and interest-free loans to employees under part 3 chapter 7 in force on 6 April beginning the year of assessment. The rate for 2000–01 is 6.25%.79 |
15A.4.2.2 Example |
E is an employee earning over £8,500 p.a. On 6 April 1996, E begins to occupy a house provided by X, E’s employer. The house had been purchased by X on 9 November 199280 for £196,000; X then spent £8,000 on improvements. E reimbursed X £1,000 of the expenditure and pays a rent which exceeds the value to him of the property by £2,000. The official rate of interest on 6 April 2000 was 6.25%. The cost to the employer of providing the property is: |
(£196,000 + £8,000) − £1,000 = £203,000 |
The additional value of the property to E is: |
[(£203,000 − £75,000) × 6.25%] − £2,000 = £6,000 |
E is therefore taxed on an additional benefit of £6,000 in 2000–01. |
15A.4A Minor Receipts |
Part 3 of the Act began with chapter 1 which contained just one provision—section 62 on earnings which, as we have seen, is the counterpart to the old section 19. Chapters 2–11 have dealt with Taxable Benefits and done so in a way which is not always comfortable. We have here dealt with some areas of the benefits code but the remaining parts—chapters 3, and 6–11 are discussed, as now, in chapter 17A. The final chapter of part 3—chapter 12—entitled ‘Payments |