SE23053 - Car benefits: meaning of "without any transfer of the property in it"

Section157 (1) ICTA 1988

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. In other words, say an employer gives or sells a car outright to an employee, the employee will have become the owner of the vehicle, and 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, SE23055.

There may be a Schedule E charge in respect of the transfer see SE21640 onwards.

It used to be argued that a transfer of part of the ownership in the vehicle avoided the car benefit charge, but this argument was quashed by the High Court in the case of Christensen (HMIT) v Vasili. If the other conditions are met, the car benefit charge is incurred whether or not the employee owns a part share in the car.