Benefit is applicable to employees. Not applicable to directors who are employees too.
What is the Rule?
The taxable value of the accommodation is the lower of:-
- 10% of the gains or profits from employment LESS any rent paid by the employee; OR;
- the annual value of the premises.
Illustration
Annual value - $38,000
Rent paid by employee - $700 x 12 months = $8,400
Remuneration from employment - $150,000
Which of the following presentation is correct?
Option A
Lower of:-
- (10% x $150,000) = $15,000 or
- $38,000
The lower amount being $15,000 ==> taxable benefit would be $15,000 less $8,400 = $6,600.
Option B
Lower of:-
- (10% x $150,000) less $8,400 = $6,600 OR;
- $38,000
Thus the taxable benefit would be $6,600.
Which do you think is the correct presentation though both give you the same answer?