Part 3

Employment income: earnings and benefits etc. treated as earnings
Chapter 5

Taxable benefits: living accommodation

Accommodation costing £75,000 or less

Cash equivalent: cost of accommodation not over £75,000
105
1
The cash equivalent or modified cash equivalent is to be calculated under this section if the cost of providing the living accommodation does not exceed £75,000.
2
The cash equivalent is the difference between—
a
the rental value of the accommodation for the taxable period, and
b
any sum made good , on or before 6 July following the tax year which contains the taxable period, by the employee to the person at whose cost the accommodation is provided that is properly attributable to its provision.
2A
The modified cash equivalent is equal to the rental value of the accommodation for the taxable period.
3
The “rental value of the accommodation” for the taxable period is (subject to subsections (4) and (4A)) the rent which would have been payable for that period if the property had been let to the employee at an annual rent equal to the annual value.
4
Subsection (4A) applies where—
a
a rental amount is payable by the person (“P”) at whose cost the accommodation is provided in respect of the whole or part of the taxable period (“
the relevant period
”), and
b
the amount so payable is payable at an annual rate greater than the annual value.
4A
Where this subsection applies—
a
subsection (3) does not apply to the relevant period, and
b
instead the “rental value of the accommodation” for the relevant period is the rental amount payable by P in respect of the relevant period.
4B
A reference in subsection (4) or (4A) to a rental amount payable by P in respect of the relevant period is to the sum of—
a
any rent for the period payable by P, and
b
any amount attributed to the period in respect of a lease premium (see sections 105A and 105B).
5
If the rental value of the accommodation for the taxable period does not exceed any sum made good by the employee as mentioned in subsection (2)(b), the cash equivalent is nil.
S. 105(4)-(4B) substituted for s. 105(4) (with effect in accordance with s. 71(4)-(6) of the amending Act) by Finance Act 2009 (c. 10), s. 71(2)(b)
Words in s. 105(1) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 16(2)
S. 105(2A) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 16(3)
Words in s. 105(2)(b) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(5)
Words in s. 105(3) inserted (with effect in accordance with s. 71(4)-(6) of the amending Act) by Finance Act 2009 (c. 10), s. 71(2)(a)