Income Tax (Earnings and Pensions) Act 2003 section 100B

Section 100A(1): exceptions

Section 100B sets out the circumstances in which the exemption from a living accommodation benefit charge for overseas property held through a company (under section 100A) will not apply, meaning the benefit must be reported and taxed in the normal way.

• The exemption is lost if the company acquired its interest in the property from a connected company at below market value, or the interest derives from one that was so acquired.
• The exemption is lost if, after the relevant time, a connected company has incurred expenditure on the property or has had loans outstanding to the company (unless the borrowing is at a commercial rate or already gives rise to a taxable benefit under the loans rules).
• The exemption is lost if the accommodation is provided under an arrangement whose main purpose, or one of whose main purposes, is the avoidance of tax or national insurance contributions.
• A "connected company" means one connected with the director (D), a member of D's family, or an employer of D, or a company connected with such a company.