Income Tax (Earnings and Pensions) Act 2003 section 278

Abortive acquisition benefits and expenses

Section 278 deals with the tax treatment of benefits and expenses connected with an attempted but unsuccessful acquisition of a new residence as part of a job-related relocation.

• Benefits provided or expenses incurred must have been aimed at acquiring an interest in a residence.
• The acquisition must have fallen through either due to circumstances beyond the person's control or because they reasonably decided not to proceed.
• The benefits or expenses would have qualified under section 277 (acquisition benefits and expenses) had the purchase completed successfully.
• Where these conditions are met, the abortive costs can still qualify for the same exemption treatment as successful acquisition costs.