16 |
through a non-resident company (a favourite way of avoiding IHT), there will be a charge to income tax under this rule if she is a director, which is usually the case.59 |
15A.4.1.1 Otherwise Chargeable |
Section 102 (ex 145) does not apply where the accommodation is chargeable to X as income under some other provision. One way60 in which X would be ‘otherwise chargeable’ is by coming within the general principle of convertibility; X would be chargeable on the profit which could have been made by sub-letting the property or granting licences. However, X would also be chargeable under the general principle if the employer offered X £20 as an alternative to the accommodation, ie a salary sacrifice. This proved tempting for taxpayers and was stopped by legislation in 1996. ITEPA section 109 (ex TA 1988, section 146A) states that the provision of a cash alternative does not prevent section 10261 from applying. This makes section 102 the prior but not exclusive charge; any excess can be taxed under section 62. |
15A.4.1.2 Provided by Reason of Employment? |
Whether living accommodation is provided by reason of the employment is a question of fact; however, it is deemed to be so provided if it is provided by the employer. This assumption can be avoided if it is shown that (a) the employer is an individual and provides the accommodation in the normal course of domestic, family or personal relationships,62 or (b) the accommodation is provided by a local authority for its employee on terms which are no more favourable than those |