Are teachers enjoying free accommodation at a hostel where they provide supervision over children in higher education, taxable on this fringe benefit? Say it be a flat or a room?
Important:
This answer is based on tax law year ending 28 February 2019.
Answer:
We suspect that your request relates to whether this benefit will have a ‘no value’. Paragraph 9(7) and (7A) provide for the circumstances where the no value will apply. It doesn’t apply here. The only option
The only relief then lies in paragraph 9(5) - it allows, where SARS is satisfied, by reason of the situation, nature or condition of the accommodation or any other factor, that the rental value of such accommodation is less than the rental value thereof determined in accordance with the formula (contemplated in subparagraph (3)), that SARS may determine such rental value at such lower amount as to him or her appears fair and reasonable.
It effectively replaces the formula value with a market related value. A request, that must be made by the employer, must be submitted on a form EMPRB. It is specifically stated, on this form, that “until the application form has been completed in full and submitted to SARS, along with all the required documents, the employer is deemed not to have applied for a directive.”
The employer can then only apply this lower amount as the value of the taxable benefit after application was made to SARS.