188体育

Section 404(5) ITEPA 2003

A termination settlement provides for:
- 拢36,000 paid in 3 equal annual instalments from 1 January 2004 plus - use of a car. The cash equivalent of this benefit is calculated (see EIM13270) as 拢2,000 for 2003/04, 拢7,000 for 2004/05 and 拢7,250 for 2005/06.

The total is 拢52,250 (拢36,000 + 拢2,000 + 拢7,000 + 拢7,250), against which only one 拢30,000 threshold is available. Following EIM13520:
- for 2003/04, the total provision for tax purposes is 拢14,000 (拢12,000 cash plus 拢2,000 benefit cash equivalent). This is all covered by 拢14,000 of the threshold, leaving 拢16,000 balance of threshold to carry forward. - for 2004/05, the total provision for tax purposes is 拢19,000 (拢12,000 cash plus 拢7,000 benefit cash equivalent). This is more than the available threshold of 拢16,000 so the latter must be set off in the order explained in EIM13520. So it is first set off against the payment of 拢12,000 made on 1 January 2005, leaving 拢4,000. That 拢4,000 is then set off against the total cash equivalents at 5 April 2005 of 拢7,000. So 拢3,000 is charged to tax. - for 2005/06, there is no threshold brought forward so the 拢12,000 cash payment and the 拢7,250 benefit cash equivalent are chargeable in full under Section 401 ITEPA 2003.