ACCA TX ^UK Syllabus B. Income Tax And Nic Liabilities - Beneficial loan benefit - Past Papers ^{10 / 12}

Patience was born on 31 December 1954. She retired on 31 December 2014, and on that date ceased employment and self-employment. The following information is available in respect of the tax year 2014–15: Employment

(4) On 25 June 2014, Patience was given a clock valued at £600 as an award for her 25 years of teaching at her employer’s school. She has not previously received any similar awards.

Required:
What taxable benefit will arise on the beneficial loan?

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%

John and Rhonda Beach are a married couple. The following information is available for the tax year 2012–13:

John Beach
(5) During 2009 Surf plc provided John with a loan which was used to purchase a yacht. The amount of loan outstanding at 6 April 2012 was £84,000. John repaid £12,000 of the loan on 31 July 2012, and then repaid a further £12,000 on 31 December 2012. He paid loan interest of £1,270 to Surf plc during the tax year 2012–13. The taxable benefit in respect of this loan is calculated using the average method.

Required:
What taxable benefit will arise?