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Income Tax (Earnings and Pensions) Act 2003

Section 206: Cost of the benefit: transfer of used or depreciated asset

815.This section derives from section 156(3), (4) and (9)(b) of ICTA. Under the normal rules for determining the cash equivalent for the purposes of this Chapter, the cost of the asset would be used. This section provides that market value at the time of transfer may be used instead of cost.

816.Subsections (1) and (2) provide for the alternative of market value to be used. They derive from section 156(3) and the opening words of section 156(4).

817.Subsections (3) to (5) derive from section 156(4) and (9)(b). As the relief provided by subsections (1) and (2) of this section could be abused by providing an asset for use and subsequently transferring it when the market value was very small, the relief is limited. This provision applies only to assets within section 205. In the case of an asset provided before this Act comes into force the transitional provision in paragraph 32 of Schedule 7 to this Act will apply.

818.Subsection (5) is derived from section 156(4)(a) and (b).

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