Personal Tax Past Paper

Can anyone help me with task 1.2 question b)
the taxable benefit in kind arising from the accommodation?

House was purchases for £214000
Extended in October 2012 at a cost of £18500
Extended again July 2014 at a cost of £5400
Annual Value is £4700

The answer is £9819 and I've no idea how this is worked out



  • KernowAccountant
    KernowAccountant Registered Posts: 103 ? ? ?
    The basic value of the benefit is the annual value; £4,700.

    As the original cost of the property exceeds £75,000 the 'expensive accommodation' charge also applies. This is the official rate of interest multiplied by the cost of the property, plus capital enhancements prior to the year for which the benefit is calculated (assumed to be 2014/15 in this question), less £75,000.

    i.e. (£214,000 + £18,500 - £75,000) x 3.25% = £5,119.

    Adding both elements of the benefit charge together (£4,700 + £5,119) gives £9,819.
  • leption
    leption Registered Posts: 36
    Did my Personal Tax today I'm sure I've failed it. This is the third exam in a row now I've failed. So disheartening to carry on now. I've read the book from beginning to end and understood it, did lots of practice practice questions still it wasn't enough. There isn't enough time to do 11 questions and some of the questions had more than five parts to it. 2hrs is not enough. How can AAT justify the Credit control paper 2.5 hrs with 7 questions and the Personal Tax paper with 11 questions and they give you 2hrs where is the sense in that?
  • hkaur92
    hkaur92 Registered Posts: 28
    Hoping somebody could help me too. I am stuck on the same question and understand how Kernow has worked it out but I don't understand why my answer sheet from AAT says that the answer is £11,000 for 'the taxable benefit in kind from the accommodation?'

    Also, does the further extension cost of £5,400 not get included?

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