Income Tax (Earnings and Pensions) Act 2003 section 398

Valuation of benefits

Section 398 sets out the rules for calculating the taxable value of benefits received under approved retirement benefits schemes, covering both cash and non-cash benefits.

• Cash benefits are valued simply at the amount of cash received
• Non-cash benefits are valued at the higher of their money's worth as earnings or their cash equivalent under the benefits code
• References to employee and employer in the benefits code are modified to cover benefit recipients and former employers respectively
• A special adjustment applies where accommodation costing over £75,000 is provided and the recipient makes good more than the rental value