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1. Where it is necessary for the proper performance of the employee’s duties that E should reside in the accommodation;
2. Where the employment is of a type where it is customary to provide living accommodation, and the accommodation is provided for the better performance of the duties of the employment; and
3. Where, there being a special threat to E’s security, special security arrangements are in force and E resides in the accommodation as part of those arrangements.

Exceptions (a) and (b) are themselves excluded (so that a charge to income tax will arise under sections 102, 145 after all) if the taxpayer is a director of the company providing the accommodation; however, this is softened by excluding a director who works full time and does not have a material interest in the company;⁶⁷ (see below at §17A.1).

15A.4.1.5    Exceptions—Examples

Employees coming within (a) above will include caretakers, hotel managers, and other staff who are compelled to live in hotels and the bank manager in Tennant v Smith.⁶⁸ For this group the necessity to be in occupation must be due to the relationship between the duties and the accommodation, and not to the personal exigencies of the taxpayer.⁶⁹

Exception (b) covers farmworkers, miners and even some university teachers; the requirement that it should be ‘customary’ to provide the accommodation in that kind of employment is an interesting one. Customs can change and can, presumably, be satisfied even though occupation is not required by the employer. The rule that the provision must be for the better performance of the duties is presumably a question of fact and is to be determined objectively, paying attention to—but without being bound by—the terms of the employment and the views of the employer. In

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