Personal Tax 2011 standards : Practice cba
nicd1981
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Im really Confused as question 1.6 part b
on 1st oct ken was provided with the loan of a music system costing 1000 for personal use calculate the benefit in kind: answer is £100
Now as its below 5000 i had the answer as 0
why is it 100? Is it because its for personal use? and even then how does it come out at 100?
sorry, but exams on Tuesday and im struggling with remembering everything !
advice would be appreciated xx
nic x
on 1st oct ken was provided with the loan of a music system costing 1000 for personal use calculate the benefit in kind: answer is £100
Now as its below 5000 i had the answer as 0
why is it 100? Is it because its for personal use? and even then how does it come out at 100?
sorry, but exams on Tuesday and im struggling with remembering everything !
advice would be appreciated xx
nic x
Nicola Donnelly ,MAAT, MIP, CIMA Dip MA
Email: donnellynicola7@gmail.com
Facbook Page: MEND Accounting
Blog: http://wannabeanaccountant.blogspot.co.uk
Twitter: @mendaccounting
Website: http://www.mendaccounting.co.uk
Email: donnellynicola7@gmail.com
Facbook Page: MEND Accounting
Blog: http://wannabeanaccountant.blogspot.co.uk
Twitter: @mendaccounting
Website: http://www.mendaccounting.co.uk
0
Comments

Hello Nic
You need to calculate the benefit for assets made available for private use. It is calculated as 20% of the £1,000 and then pro rated for the year. This is not a loan when the rules are different.
Hope this helps.
JC~ An investment in knowledge always pays the best interest ~Benjamin Franklin0 
Thanks Jo, I understand now. So as its a loan of an asset instead of a loan of cash its 20% and as its October its divided by two as October is the 7th month so the last 6 months of the year ? divide by two
yes that makes sense
Thanks very much jo xNicola Donnelly ,MAAT, MIP, CIMA Dip MA
Email: donnellynicola7@gmail.com
Facbook Page: MEND Accounting
Blog: http://wannabeanaccountant.blogspot.co.uk
Twitter: @mendaccounting
Website: http://www.mendaccounting.co.uk0 
Thanks Jo, I understand now. So as its a loan of an asset instead of a loan of cash its 20% and as its October its divided by two as October is the 7th month so the last 6 months of the year ? divide by two
yes that makes sense
Thanks very much jo x
Hello Nic
Yes, it is a loan of an asset rather than a beneficial loan where you calculate the benefit if the loan is over £5k using the ORI. Remember you calculate the full amount of the loan, not just the difference over £5k
Yes you can divide by two or take the 20% of £1k and then multiply 6/12  same thing.
Good luck Tuesday.
JC~ An investment in knowledge always pays the best interest ~Benjamin Franklin0 
i was stuck on that question too, i have my exam today but i didnt understand the loan part of it or the sound system part of it0

How did your exam go Toria?
Good luck tomorrow Nic... any last minute questions post them here as I am sure there will be someone who can help if needs be~ An investment in knowledge always pays the best interest ~Benjamin Franklin0 
on the same pratice paper on 1.5 the co2 emmision is 13% it says the car is 118g/km so i round it to the nearest 5 which is 115 then i takeaway it by 80 76120 isg/km is 10% divided it by 5 get 7 + 10= 17 then plus 3 because its a diesel. Must be doing something wrong someone please help me got exam today0
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