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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Termination payments and benefits: valuation of non- cash benefits received on or after 6 April 1998

Section 415 ITEPA 2003

This guidance deals only with the valuation of non-cash benefits received on or after 6 April 1998. For the valuation of non-cash benefits received before that date, see SE13255). To determine when a non-cash benefit is received see EIM13110.

Finance Act 1998 introduced new rules for valuing non-cash benefits received on or after 6 April 1998. Their value is defined as the cash equivalent of the benefit.

Strictly, that cash equivalent is the greater of:
* the amount that would be chargeable under Section 62 ITEPA 2003 if the benefit were earnings (see EIM00515). This is known for convenience as its Section 62 value and * its cash equivalent as defined through the benefits code (see EIM21006)but

in practice, the Section 62 value only needs to be considered if the benefit consists of the transfer of an asset that has grown in value since being acquired by the person providing it, see example EIM13934. In other circumstances, there is no need to calculate the Section 62 value, use the cash equivalent as defined through the benefits code. For details of this see EIM13280.

If the recipient makes good some of the cost of the benefit, this sum is deducted in arriving at the cash equivalent.