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HMRC internal manual

Employment Income Manual

Car benefit: meaning of without any transfer of the property in it

Section 114(1)(a) ITEPA 2003

A car benefit charge will only apply if the car is made available to the employee (or member of the employee’s family or household) without the employee (or family member, as the case may be) becoming the outright owner of the car.

If an employer gives or sells a car outright to an employee, the employee will have become the owner of the vehicle. Therefore there can be no car benefit charge in respect of that car after the date of sale or gift. This will also be true for a properly structured employee car purchase scheme, see EIM23225.

Other tax consequences of a transfer

There may be an employment income charge in respect of the transfer, see EIM21640 onwards.

Car leased to employee or director

See EIM23215.

Part ownership

See EIM23210.