Commentary

D6.652 Profit extraction from family companies—benefits in kind

Corporate tax
Corporate tax | Commentary

D6.652 Profit extraction from family companies—benefits in kind

Corporate tax | Commentary

D6.652 Profit extraction from family companies—benefits in kind

This article provides brief narrative on some of the benefits in kind that may be appropriate in the context of enhancing the overall package provided by the family company. For detailed guidance on the income tax rules, see Division E4.6.

The company van

If the use of a van is a feasible proposition, a considerable tax advantage1 can be gained as the total benefit for the van and van fuel is well below that for a comparable car.

Broadly, a fixed sum is treated as the cash equivalent of the benefit for the van, regardless of the age of the van, if the 'restricted private use condition' is not met. A further fixed sum is treated as the cash equivalent of the benefit for van fuel. The current and historic cash equivalent rates are at T6.115. For detailed guidance, see E4.630 and E4.630C.

However, the more image-conscious proprietor may not be willing to switch from a car to a traditional van. As to

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