Taxation of Benefits in Kind and Capital Gains - Example Scenarios

Q1 Throughout 2019/20 TDW Ltd provided Andrea with a 2200 cc petrol poweredcompany motor car with a list price of £19,400. The official CO2 emission rate for the motor car is 270 grams per kilometre. TDW Ltd paid for all of the motor car’s running costs of £6,200 during 2019/20, including petrol used for private journeys. Andrea pays £150 per month to TDW Ltd for the use of the motor car.

Q2 TDW Ltd has provide Andrea with living accommodation since 1 November 2018. The property was purchased on 1 January 2016 for £130,000. The company spent £14,000 improving the property during March 2017, and a further £8,000 was spent on improvements during May 2019.

Q3 The value of the property on 1 November 2018 was £170,000, and it has a rateable value of £7,000. The furniture in the property cost £6,000 during November 2018. Andrea personally pays for the annual running costs of the property amounting to £4,000.

Q4 Throughout 2019/20 TDW Ltd provided Andrea with a mobile telephone costing £500. The company paid for all business and private telephone calls.

Q5 On 1 July 2019 TDW Ltd provided Ben with an interest free loan of £120,000 so that he could purchase a new main residence. He repaid £20,000 of the loan on 1 October 2019.

Q6 During 2019/20 TDW Ltd paid £9,300 towards the cost of Ben’s relocation. His previous main residence was 125 miles from his place of employment with the company. The £9,200 covered the cost of disposing of Ben’s old property and of acquiring his new property.

Q7 From 1 July 2019 TDW Ltd provided Ben with a petrol powered second hand motor car which has a list price of £9,200. The official CO2 emission rate for the motor car is 112 g/km. no fuel was provided by the company; Ben just claimed fuel for his business mileage. Ben had the use of the car until 30 September 2019 when his new company car arrived.

Q8 During the period from 1 October 2019 until 5 April 2020 TDW Ltd provided Ben with a new diesel powered company motor car which has a list price of £11,200. The official CO2 emission rate for the motor car is 134 g/km. Ben reimburses TDW Ltd for the fuel used for private journeys.

Q9 During 2019/20 TDW Ltd provided Chai with a two-year old company van, which was available for private use. The van was unavailable during the period 1 August to 30 September 2019. Chai was also provided with private fuel for the van.

Question 2

Q10 TDW Ltd has provided Chai with a television for her personal use since 6 April 2017. The television cost TDW Ltd £800 in April 2017. On 6 April 2019 the company sold the television to Chai for £150, although its market value on that date was £250.

Q11 Throughout 2019/20 TDW Ltd provided Chai with free membership of its health club. The normal annual cost of membership is £800. This figure is made up of direct costs of £150, fixed overhead costs of £400 and a profit of £250. The budgeted membership for the year has been exceeded, but the health club has surplus capacity.

Q12 On 1 January 2020 TDW Ltd provided Chai with a new computer costing £1,900. She uses the computer at home for personal study purposes.

Q13 In July 2019 David and Angela sold a classic Ferrari motor car for £34,400. The motor car had been purchased on 17 January 2008 for £27,200

Q14 On 01 February 2020 David and Angela sold a house for £381,900. The house had been purchased on 1 June 1997 for £86,000.

Q15 David and Angela occupied the house as their main residence from the date of purchase until 1 May 1999 when Angela left to work in Exeter, Angela and David living in rented accommodation. They returned to the house on 1 November 2000 and stayed until 1 July 2003 when Angela left to take up a post in the USA, again David and Angela lived in rented accommodation. They returned to the house on 1February 2006 and stayed until 1 June 2017 when they bought a house in Nottingham and made this house as their principal private residence.

Q16 On 5 May 2019 David transferred his entire shareholding of 20,000 £1 ordinary shares in Bend Ltd, an unquoted trading company, to Angela. On that date the shares were valued at £64,000. David’s shareholding had been purchased on 21 June 2016 for £48,000.

Q17 On 14 February 2020 David made a gift of 15,000 £1 ordinary shares in Galatico plc to his son. On that date the shares were quoted on the Stock Exchange at £2.90 - £3.10. David had originally purchased 8,000 shares in Galatico plc on 15 June 2017 for £17,600 and he purchased a further 12,000 shares on 24 August 2017 for £21,600. David total shareholding was less than 1% of Galatico plc’s issued share capital.