# PTAX Question

JoshhSwFc
Registered Posts:

**9**
An employer offered interest free loans to each of his employees as follows:

Jules received the following interest free loans. She has not repaid any of these loans.

01/01/13 4000

01/01/16 5000

01/01/17 3000

Using the average method, what is Jules's assessable benefit in kind on these loans in 16/17?

The answer is £315. I may be acting dumb at this time in a morning but I need some guidance!

Much appreciated

Jules received the following interest free loans. She has not repaid any of these loans.

01/01/13 4000

01/01/16 5000

01/01/17 3000

Using the average method, what is Jules's assessable benefit in kind on these loans in 16/17?

The answer is £315. I may be acting dumb at this time in a morning but I need some guidance!

Much appreciated

0

## Comments

163Loan at 5/4/17 is £12,000

Average = (9000+12000)/2 = 10,500

Benefit = 10,500 x official interest rate (given in the question or accompanying tax data)

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5The answer would be £1650 - this is because Lou is not a connected persons, therefore we would use the proceeds in the calculation of the gain. Therefore:

42,000

(20650)

Gives chargeable gain of

21350

Less annual exempt amount

(11100)

Taxable gain: 10250.

Since Lou has 4000 remaining in his basic rate tax band (32000 - 28000)

4000 of the taxable gain is charged at 10% to give £400

and the remaining 6250 is charged at 20% to give £1250

Total of £1650 capital gains tax payable. Hope that helps!