Income Tax Act 2007 section 742D

Value of benefit provided by making movable property available

Section 742D sets out how to calculate the taxable value of a benefit that arises when movable property is made available to a person without ownership of the property being transferred.

• The annual benefit value is calculated using the formula CC × R × D / Y − T, where CC is the capital cost, R is the official interest rate, D is the number of days the property is available, Y is the number of days in the tax year, and T is any amounts the recipient has paid towards the property's availability or upkeep
• Capital cost (CC) is the higher of the acquisition cost and the market value at the time of acquisition, plus any expenditure exclusively incurred to enhance the property's value
• If the official rate of interest changes during the period the property is available, R is calculated as a weighted average rate across the days in that period
• Movable property means any tangible movable property other than money — so it covers items such as artwork, yachts, jewellery, and similar physical assets