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HMRC internal manual

Employment Income Manual

Particular benefits: assets placed at the disposal of a director or employee: annual value

Sections 205(3), 207 and 208 ITEPA 2003

The ‘annual value of the use of an asset’ depends on the nature of the asset as shown in the following table.

Nature of asset Annual value of use
Land (including buildings that are not rated) The annual rental value determined in accordance with section 207 ITEPA 2003 (see below)
Rated buildings, other than those used as living accommodation The gross rating value
All others assets, except motor cars or vans  
  20% of the market value of the asset at the time it was first used to provide a benefit. For the meaning of ‘market value’, see below.  
  Motor cars Not applicable (see EIM23000)
  Vans Not applicable (see EIM22700)


Annual rental value

Annual rental value is defined in section 207 ITEPA 2003 as:

“The rent that might reasonably be expected to be obtained on a letting from year to year if:

* the tenant undertook to pay all usual tenant's taxes, rates and charges and
* the landlord undertook to bear the costs of the repairs and insurance and other expenses, if any, necessary for maintaining the land in a state to command that rent."

Meaning of “market value”

The market value of an asset at a particular time is defined (section 208 ITEPA 2003) as the price that it might reasonably have been expected to fetch on a sale in the open market at that time.

Refer to an Inspector any dispute about the “market value” of an asset when it was first applied as a benefit.