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HMRC internal manual

Employment Income Manual

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

Section 415 ITEPA 2003

To determine when a non-cash benefit is received, see EIM13110. The value of non-cash benefits is defined as the cash equivalent of the benefit.

Strictly, the 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.