EIM21888 - Asset made available without transfer to a director or employee: Deduction for unavailability of the asset for private use (step 2)
Section 205A ITEPA 2003
From 6 April 2017 only
Step 2: Deduct any amounts for unavailability of the asset for private use (except land)
Section 205A ITEPA 2003 provides the rules for calculating whether there should be a deduction because the asset was unavailable for private use at any point during the relevant tax year.
Section 205A(2) ITEPA 2003 defines what unavailable means. The situations are:
- The day before the asset is first available to the employee or director (or family or household).
- The day after the asset is no longer available to the employee or director (or family or household).
- If for more than 12 hours in any day the asset: - is not in a fit condition to use - is undergoing repair of maintenance - cannot be lawfully used - a person has possession of the asset by way of a lien over it, and that person is not the employer, a person connected with the employer, the employee or director or a member of their family or household - is used in such a way that it means it is not being used by, or at the direction of, the employee or director (or the employee’s family or household).
- If on a particular day the employee or director is obliged to use and uses the asset in the performance of their duties and does not use the asset for anything other than the performance of those duties.
This means that if on any day there is both private and business use the unavailable for private use rules do not apply.
The amount of the deduction is calculated by dividing the number of days the asset is unavailable for private use by the number of days in the year and then multiplying the resulting figure by the annual cost of asset.
EIM21890 gives an example of how this calculation works