Assets made available without transfer of ownership

08 December 2016

Draft legislation has been published in provision 5 on page 5 of the draft provisions for Finance Bill 2017 which will make changes to Chapter 10 of Part 3 of ITEPA to introduce specific rules for computing the cash equivalent of an asset that is made available to an employee for private use. Setting the cash equivalent of an asset by its availability for private use appears elsewhere in the benefits legislation and is well understood.

The overarching rule that if the asset is made available for private use the cash equivalent is set at 20% of the market value when the asset was first provided plus the amount of any additional expense will remain. The legislation will introduce new rules allowing the cash equivalent to be reduced for days when the asset is not available for private use and there are also rules to reduce the level of the taxable benefit when the asset is made available to more than one employee for their private use in the same tax year.

This measure will also allow for the reduction in the level of the taxable benefit if the asset is first made available part way through the year or permanently ceases to be available part way through the year

A tax information and impact note (TIIN) has also been published and contains a useful worked example.

Comments are welcomed by 1 February 2016 and should be sent by email to employmentincome.policy@hmrc.gsi.gov.uk or in writing to the

Employment Income Policy team, Personal Tax: Customer, Product and Process, HM Revenue and Customs, Room 1E/08, 100 Parliament Street, London SW1A 2BQ.