SE23186 - Car benefits: calculation of price as regards a year; classic car - example
Section 168F ICTA 1988
When working through this example you may find it useful to refer to:
- the general introduction to the calculation of price of a car as regards a year atSE23100
- the flowchart setting out the steps involved in calculating the price of a car as regards a year atSE23100a.
- the guidance on classic cars atSE23170onwards.
On 1 May 1998 a company buys a car for £12,000 and provides it for private use to the director. The director contributes £2,000 to the cost. It was first registered in 1951 and had a list price then of approximately £2,800. During the year the car is renovated and on 5 April 1999 it has a market value of £17,500.
Calculation of the price of the car as regards 1998/99
| Price of the car as calculated on basis of list price and on assumption that the renovations simply involve provision of replacement accessories ( SE23155) so that no additions made to price in respect of accessories | £2,800 |
| Less capital contribution | (£2,000) |
| Price of car as regards 1998/99 without classic car rules | £800 |
However, this is not the end of the story. There are two key factors to take into account:
- The car is at least 15 years old at 5 April 1999
- its market value for the year is £17,500, so meets the classic cars test of being at least £15,000.
The car is therefore a “classic car” within Section
168F (
SE23170 onwards)
The price of the car as regards 1998/99 is therefore
| Market value for the year | £17,500 |
| less capital contribution | £2,000 |
| Price of the car as regards 1998/99 | £15,500 |
