- 4 Marks
AT – March 2023 – L3 – Q2c – Tax planning
Advise on which housing option is more tax-efficient for the Managing Director in relation to employment and rental income.
Question
The Management of 6Up Ltd has asked for advice on which of the following options is better for their Managing Director in connection with tax planning:
Option 1:
To rent the Managing Director’s personal house for use by the Managing Director as part of his condition of employment while taking a withholding tax at the rate of 8% on the rental payment.
Option 2:
To rent another place for the Managing Director instead of his own place so he may consider renting out his place of residence.
Required:
Advise on which option is better from the standpoint of tax planning implication for the Managing Director.
Find Related Questions by Tags, levels, etc.
- Tags: Employee Benefits, Housing benefits, Tax Planning, Withholding Tax
- Level: Level 3
- Topic: Tax planning
- Series: MAR 2023
