Section 106 | Cash equivalent: cost of accommodation over £75,000

(1)The cash equivalent or modified cash equivalent is calculated under this section if the cost of providing the living accommodation exceeds £75,000.^F1

(2)To calculate the cash equivalent—Step 1Calculate the amount that would be the cash equivalent if section 105 applied (cash equivalent: cost of accommodation not over £75,000).Step 2Calculate the following amount (“the additional yearly rent”)—

(a)adding together the amounts calculated under steps 1 and 3, and

(b)(if allowed by subsection (3)) subtracting from that total the excess rent paid by the employee.

Step 3Calculate the rent which would have been payable for the taxable period if the property had been let to the employee at the additional yearly rent calculated under step 2.Step 4Calculate the cash equivalent by—

(2A)To calculate the modified cash equivalent—^F2

(a)apply steps 1 to 3 in subsection (2), as if the words “cash equivalent” in step 1 were “modified cash equivalent (for the purposes of section 105)”;^F2

(b)calculate the modified cash equivalent by adding together the amounts calculated under steps 1 and 3 as applied by paragraph (a).^F2

(3)In step 4—

(a)paragraph (b) only applies if, in respect of the taxable period, the rent paid—^F3

(i)by the employee,^F3

(ii)in respect of the accommodation,^F3

(iii)to the person providing it, and^F3

(iv)on or before 6 July following the tax year which contains the taxable period,^F3

exceeds the rental value of the accommodation for that period as set out in section 105(3) or (4)(b), as applicable, and

(b)“the excess rent” means the total amount of that excess.