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HMRC internal manual

Employment Income Manual

Particular benefits: assets transferred to a director or employee: assets transferred before they have been used or depreciated

Sections 203(2) ITEPA 2003

If a person transfers an asset to a director or employee or a member of his family or household by reason of his employment before the asset has depreciated or been used the amount chargeable is:

  • the greater of

    • the expense incurred by that person in connection with the provision of the asset less any amount made good (see EIM21120) or
    • the second-hand value of the asset in the hands of the employee if it is chargeable under Section 62 ITEPA 2003 (see EIM00540) less the amount the employee has to pay for it

This rule also applies to the transfer of any unused trading stock of the employer.

The examples at EIM21647 and EIM21648 illustrate how the rules work.