Section 147 — Income Tax (Earnings and Pensions) Act 2003: Classic cars: 15 years of age or more

Classic cars: 15 years of age or more 147 1 This section applies in calculating the cash equivalent of the benefit of a car for a tax year if—

a the age of the car at the end of the year is 15 years or more, b the market value of the car for the year is £15,000 or more, and c that market value exceeds the interim sum calculated under step 3 of section 121(1).

2 For the interim sum calculated under step 3 substitute the market value of the car for the tax year in question less any deductions under subsection (6).

3 The market value of a car for a tax year is the price which the car might reasonably have been expected to fetch on a sale in the open market on—

a the last day of that year, or b the last day in that year on which the car is available to the employee if that is earlier.

4 It is assumed that any qualifying accessories available with the car on that day are included in the sale.

5 Subsection (6) applies if the employee contributes a capital sum to expenditure on the provision of—

a the car, or b any qualifying accessory which is taken into account in determining the market value of the car.

6 A deduction is to be made from the market value of the car—

a for the tax year in which the contribution is made, and b for all subsequent years in which the employee is chargeable to tax in respect of the car by virtue of section 120.

7 The amount of the deduction allowed in any tax year is the lesser of—

a the total of the capital sums contributed by the employee in that year and any earlier years to expenditure on the provision of—

i the car, or ii any qualifying accessory which is taken into account in determining the market value of the car for the tax year in question, and b £5,000.