PTC - Purchasing an asset off the employer

tauq786x

could some1 please explain to me the benefit in kind.. for prchasing an asset of an employer.. i really dont understand it :S

hanapospis

If the employee is provided with let's say a computer with market value of £900. The employee kept the computer for two years and than he buys it from his employer for £100 with second-hand market value £400

Each year the employee paid £180 as a benefit in kind (900x20%) for a usage of a computer which belongs to the employer.

Now, if the employee buys the computer - the benefit assessed will be the higher value of either:
- market value of the date of the transfer - £400
- or market value when it was first provided less benefits already paid

In this case

- £400 or
- 900 - 180 -180 = £540

so it will be £540 less £100 already paid for the computer. So the benefit in kind is £440.

Hope that helps..

tauq786x

thank u!!!!!!!! :001_smile:

DOTTY

sorry

why is the comparison 800-180-180, do you have to take the 100 of the 900 when comparing. Also on a different note concerning chattels, you can make a deemed loss on a chattel but not if that loss becomes a gain, if this were to happen is the rule then ignored? Also sorry........... if accomondation is provided by an empoyer and the property is furnished but the accomdation is job related, does the employee have to pay 20% of the cost of the furniture?
hoping you can clear my mind.............

hanapospis

sorry.. should be 900 .. It was very late I was half sleeping:001_smile:

hanapospis

Hi,

I am not so sure about the chattels.

All chattels with expected life of less then 50years are exempt. And the rest:

- If you sell the chattel with the gain over 6,000 you have to use the fraction (5/3x(proceeds-£6000).
- If the chattel has been bought for less then £6,000 and sold for less than £6,000 it is exempt
- If the chattel has been bought for less then £6,000 and sold for more then 6,000 then you use deemed proceeds of 6,000

so if you sell chattel for 12.000 which originally cost 7.000

proceeds.........12.0000
cost ................7.000
gain ................. 7.000

5/3 (12.000-6.000) = 10.000 - it does not apply

If you sell chattels for 12.000 which originally cost 1.000

proceeds.............12.000
cost................... 1.000
gain....................11.000

5/3(12.000-6.000) = 10.000 - gain would be restricted to 10.000

If you sell chattels for 5.000 which originally cost 12.000

Deemed proceeds ......... 6000
cost...........................12.000
loss.................... .......(6.000)

Is there any other possibility?

If the accommodation is provided and the employee is using furniture owned by employer.. I think the employee has to pay a benefit in kind on this furniture (20%).

Please anyone correct me if I am wrong.

Thanks

tauq786x

in reply to point 3 above:

isnt it if you broght the chattel MORE than 6000 and sold it for LESS.. u replace the proceeds with 6000?? :S

tauq786x

thanks.. its tooo early for tax lolz

hanapospis

tauq786x wrote: »

in reply to point 3 above:

isnt it if you broght the chattel MORE than 6000 and sold it for LESS.. u replace the proceeds with 6000?? :S

well.. I still think the poing 3 is right....

hanapospis

tauq786x wrote: »

thanks.. its tooo early for tax lolz

it HAS been bought for MORE and sold for LESS.....

sorry will not try to help any more