What does section 100 of the Income Tax (Earnings and Pensions) Act 2003 do?

Section 100 exempts employer-provided living accommodation from income tax where the employee faces a special security threat. The exemption applies when special security arrangements are formally in force and the employee actually resides in the accommodation as part of those arrangements, removing any benefit-in-kind charge under United Kingdom law.

What conditions must be met for the security accommodation exemption under section 100?

Three conditions must all be satisfied: a special threat to the employee's security must exist as a specific identifiable risk, special security arrangements must be formally in place to address that threat, and the employee must actually reside in the accommodation as part of those security arrangements rather than merely having it available.

Does the section 100 exemption apply if the employee does not live in the accommodation?

No. The employee must actually reside in the accommodation as part of the special security arrangements. It is not sufficient for the accommodation simply to be available. The residence must form part of the overall security measures for the exemption to apply under United Kingdom income tax law.

What happens if the security threat is resolved but the employee continues living in the accommodation?

If the security threat is resolved and formal security arrangements are lifted, the exemption under section 100 ceases to apply. The employee continuing to live in the accommodation would then be subject to the normal income tax rules for employer-provided living accommodation, and a benefit-in-kind charge would arise.

Income Tax (Earnings and Pensions) Act 2003 section 100

Accommodation provided as result of security threat

Section 100 ensures that living accommodation provided to an employee because of a special security threat is not treated as taxable earnings.

Where an employee faces a special threat to their personal security, accommodation provided to address that threat is exempt from the normal benefit-in-kind tax charge
The exemption requires that special security arrangements are formally in force at the time the accommodation is provided
The employee must actually reside in the accommodation as part of those security arrangements, not merely have it available
This exemption overrides the rule that would otherwise treat employer-provided living accommodation as taxable earnings, including where the accommodation falls outside optional remuneration arrangements

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