Taxes Consolidation Act 1997 section 119

Valuation of benefits in kind

Section 119 sets out the rules for valuing benefits in kind (BIK) where an employer provides an employee or director with the use of an asset, transfers an asset, or provides accommodation.

• Where an asset remains the employer's property and is used by an employee, the initial cost of acquiring or producing that asset is disregarded — instead, the employee is taxed on the annual value of the use of that asset.
• Where an asset is transferred to an employee after it has been used or has depreciated, the BIK is based on the market value of the asset at the date of transfer, not the original cost to the employer.
• For accommodation (premises), the annual value of use is the market rent — the rent that might reasonably be expected on a year-to-year letting, assuming the tenant pays all usual rates and the landlord bears repair, insurance and maintenance costs.
• For any other asset (such as furniture or equipment), the annual value of use is 5% of the market value of the asset at the time it was first provided by the employer to any employee as a benefit in kind.