Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Overseas holiday homes offer exemption

01 September 2008
Categories: News , Income Tax
New legislation relates to purchases through companies

New legislation relating to holiday homes abroad purchased by UK residents through a company will enable individuals to claim exemption from the living accommodation tax charge outlined in ITEPA.

FA 2008, s 45 inserts ss 100A and 100B into ITEPA 2003, and these sections provide for an exception from the living accommodation tax charge where living accommodation outside the UK is provided by a company for a director or other officer of the company or a member of the director's family or household where all of the following apply:

  • The company is wholly owned by the director or the director and other individuals (and no interest in the company is partnership property).
  • The company's main or only asset is a relevant interest in the property.
  • Its only activities are ones that are incidental to its ownership of that interest.

As the living accommodation tax charge was not intended to apply to these circumstances, FA 2008, s 45(2) provides that ITEPA 2003, ss 100A and 100B are to be treated as always having had effect.

This means that where the provision of living accommodation outside the UK satisfies the statutory conditions, no liability to income tax in respect of the benefit of that provision arises for any tax year.

Individuals who can show that they have paid income tax for any year before 2008-09 on the benefit of living accommodation that qualifies for exemption under s 100A should contact Michael Robinson, c/o Debbie Green, HMRC, CPPT Directors Office, 5th Floor, Trinity Bridge House, 2 Dearmans Place, Salford, Manchester M3 5DT.

The following information should be provided:

  • Name, address, National Insurance number and/or unique taxpayer's reference.
  • Where relevant, the agent's name and address.
  • Details of the living accommodation outside the UK, i.e. address, type of property, uses made of the property.
  • Details of the company through which living accommodation outside the UK is provided.
  • Explanation of why the exemption applies.
  • Years for which tax has been paid on the benefit of the accommodation.
  • Evidence that tax has been paid: e.g. assessments, self-assessments, forms P11D, coding notices, correspondence with HMRC.
Categories: News , Income Tax
back to top icon