Computers, bicycles and transfer of ownership
|Category|| Technical Articles
Article by Sarah Bradford, the director of WriteTax Ltd. This article appeared in the August 2005 issue of Tax Adviser. Tax exemptions are frequently introduced to encourage a particular type of behavious. The exemptions from the benefit in kind charge that would otherwise arise on the loan of computer equipment or cycles to employees are no exception. The former was introduced in a bid to increase computer literacy among employees and the latter as part of the package of measure comprising the green travel initiative.
However, the story does not always finish at the end of the load period. The agreement may give the employee the option of purchasing the equipment and while the exemptions may have enabled the employee to enjoy the use of the asset tax-free during the load period, a tax charge may arise on any subsequent transfer of ownership.
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