Francine is employed by Fringe plc. On 1 August 2014, Fringe plc provided Francine with a loan of £96,000 to help her purchase a holiday cottage. On 1 October 2014, the loan was increased by a further £14,000 so that Francine could renovate the cottage. Francine pays interest at an annual rate of 1·5% on this loan.

The taxable benefit in respect of this loan is calculated using the average method.

Required:
Calculate Francine’s taxable benefit for the tax year 2014–15 in respect of the loan from Fringe plc. (3 marks)

Official rate of interest 3·25%