Income Tax (Earnings and Pensions) Act 2003 Schedule 7 paragraph 21

Taxable benefits: living accommodation

Schedule 7 paragraph 21 provides a transitional rule that exempts certain long-standing accommodation arrangements from the special cost calculation rule in section 107.

• Section 107 sets out a special rule for calculating the cost of providing living accommodation to employees, which can increase the taxable benefit where the property has risen in value
• This special calculation does not apply where the employee first occupied the accommodation before 31st March 1983
• The exemption only covers the living accommodation benefit charge itself — it does not affect how section 107 is applied in other contexts
• Section 107 still applies when used to value benefits under employer-financed retirement benefit schemes (section 398) or termination payments and benefits (section 415)