Office of Public Sector Information
9.—(1) All living accommodation is similar to other living accommodation unless, at the time the employee or member of the employee’s family starts to occupy the new accommodation, its market value exceeds that of the accommodation occupied immediately prior to it by more than 20%.
(2) Where the living accommodation is not capable of being sold separately (whether because it forms part of larger premises in multiple occupation or otherwise), its market value shall be taken to be such amount as would be obtained if the factors that prevented its separate sale were disregarded.
10.—(1) Living accommodation is improved property if works have been carried out to it which—
(a) materially improve it; and
(b) are not carried out wholly for the purposes of complying with a statutory requirement or a requirement imposed by a government department, a statutory body or a person holding a statutory office.
(2) For the purposes of sub-paragraph (1), a property is materially improved by works if—
(a) its market value on the date the works are substantially completed (“MVW”) exceeds what would have been its market value on that date if the works had not been carried out (“MV”); and
(b) the amount by which MVW exceeds MV is greater than 20% of MV.
(3) Where the living accommodation is not capable of being sold separately (whether because it forms part of larger premises in multiple occupation or otherwise), both MVW and MV shall be taken to be such amount as would be obtained if the factors that prevented its separate sale were disregarded.
(4) For the purposes of sub-paragraph (1)(b)—
“statutory body” means a body set up by or under an enactment (including an enactment comprised in, or an instrument made under, an Act of the Scottish Parliament);
“statutory office” means a body set up by or under such an enactment; and
“statutory requirement” means a requirement imposed by provision made by or under such
an enactment.
11. The provision of a non-cash benefit if—
(a) it was received in connection with the termination of the employee’s employment,
(b) that termination took place before 6th April 1998.
12. The provision of welfare counselling which would have been exempted by virtue of the Income Tax (Benefits in Kind) (Exemption for Welfare Counselling) Regulations 2000(3) if it had been provided in the course of the employee’s employment.
13. The provision of recreational benefits if no liability to income tax would have arisen by virtue of section 261 of ITEPA 2003 if it had been provided in the course of the employee’s employment.
14. The provision of an annual party or similar annual function if no liability to income tax would have arisen by virtue of section 264 of ITEPA 2003 if it had been provided in the course of the employee’s employment.
15. The provision of a service for the writing of a will or similar testamentary document if the cash equivalent of the benefit determined in accordance with the rules in section 203 of ITEPA 2003 does not exceed £150.
16.—(1) The provision of a benefit which—
(a) was first provided in the course of the employee’s employment; and
(b) satisfied Conditions 1 to 5 of regulation 3 of the Income Tax (Benefits in Kind) (Exception for Employment Costs resulting from Disability) Regulations 2002(4) (“the 2002 Regulations”) at that time.
(2) The replacement, whenever provided, for a hearing aid or other equipment, services or facilities mentioned in Condition 3 of the 2002 Regulations where the aid, equipment, services or facilities are no longer usable or appropriate to the needs of the employee.
(This note is not part of the Regulations)
These Regulations exempt specified non-cash benefits provided to former and current employees under an employer-financed retirement benefits scheme from the charge to tax on employer-financed benefits under section 394 of the Income Tax (Earnings and Pensions) Act 2003 (“ITEPA 2003”).
Regulation 1 provides for the citation, commencement and effect of these Regulations.
Regulation 2 provides for the interpretation of certain expressions.
Regulation 3 provides for the exclusion (from tax) of the benefits specified in the Schedule.
Part 1 of the Schedule describes certain benefits that consist of, or relate to, living accommodation.
Paragraph 1 exempts living accommodation that had been provided by a local authority employer. Paragraph 2 exempts accommodation that had been provided for the proper performance of the employee’s duties, and paragraph 3 extends a similar exemption to family members staying on in the accommodation after the employee’s death. Paragraph 4 exempts accommodation for ministers of religion. Paragraph 5 exempts accommodation provided because the employee’s security was at risk. Paragraphs 6 to 8 exempt removal expenses, repairs and alterations and council tax.
Part 2 of the Schedule contains interpretation provisions for use with Part 1. Paragraph 9 is about similar accommodation and is relevant primarily where an exemption extends to replacement accommodation. Paragraph 10 is designed to counter abuse in the form of extensive improvements to property.
Part 3 of the Schedule describes other types of benefit.
Paragraph 11 exempts the provision of benefits that were provided in connection with the termination of employment before 6th April 1998. Paragraphs 12 to 16 exempt welfare counselling, recreational benefits, annual parties and similar functions, the writing of wills and the provision of equipment for the disabled.
Most of the exemptions for the benefits described in both Parts mirror, with necessary modification to reflect the situation of employees who have since retired or died, exemptions conferred in computing employment income under ITEPA 2003.
A full regulatory impact assessment has not been produced for this instrument as no impact on the private or voluntary sectors is foreseen.
The Employer-financed Retirement Benefits (Excluded Benefits for Tax Purposes) Regulations 2007