EIM21892 - Asset made available without transfer to a director or employee: Unavailability - applying the sharing rules (step 3)

Section 205B ITEPA 2003

From 6 April 2017 only

Step 3: Apply the sharing rules (if appropriate)

This step only applies if during the relevant tax year the asset is available to more than one employee or director for private use at the same time (including their respective family and household). Where this is the case the combined total of the chargeable benefits for each employee or director should be no greater than the annual cost of the benefit (calculated under section 205(2) ITEPA 2003).

If the asset is shared then the chargeable benefit is calculated for each employee applying steps 1 and 2 and then it is reduced on a just and reasonable basis depending on how the asset has been shared.

The sharing rules do not apply if the asset is made available for private use to different employees on some form of rota (or something similar). In other words, the employees do not have the asset available for private use at the same time. However, a deduction might be due under section 205A(2)(c)(v) ITEPA 2003 where another employee uses the asset for more than 12 hours during a day.