Income Tax (Trading and Other Income) Act 2005 section 41

Timing and amount of certain qualifying benefits

Section 41 sets out the rules for determining when a qualifying benefit is treated as provided and how to calculate the amount of that benefit for the purposes of restricting the employer's tax deduction.

• Cash benefits are treated as provided when the money is treated as received under the employment income rules for money earnings.
• Where the benefit involves the transfer of an asset, the deductible amount is based on the cost of the asset to the scheme manager, any deduction the employer would have received on transferring it, and the cost of any chargeable relevant step.
• The deductible amount for an asset transfer or a chargeable relevant step is capped at the amount actually charged to income tax on the employee (or that would have been charged if the employee had been UK resident).
• Where the benefit is a chargeable relevant step under the disguised remuneration rules that does not involve a cash payment or an asset transfer, the deductible amount is the cost of that step, again subject to the income tax cap.