Finance Act 1977

34 Expense connected with living accommodation

(1) After section 63 of the Finance Act 1976 (cash equivalent of benefits charged under section 61) there shall be inserted the following section:—

“63A Expense connected with living accommodation.

(1) This section applies where, in the case of a person employed in director's or higher-paid employment, living accommodation is provided by reason of the employment and, accordingly, a charge to tax would arise in his case under section 33 of the Finance Act 1977 (living accommodation for employees) but for the case being one of those specified in subsection (4) of that section (representative occupation).

(2) Where, by reason of expenditure incurred in one or more of the following, that is,—

(a) heating, lighting or cleaning the premises concerned;

(b) repairs to the premises, their maintenance or decoration;

(c) the provision in the premises of furniture, or other appurtenances or effects which are normal for domestic occupation,

or by reason of such expenditure being reimbursed to the employee, an amount falls to be included in the emoluments of his employment, that amount shall not exceed the limit specified in subsection (3).

(3) That limit is—

(a) 10 per cent. of the net amount of the emoluments of the employment or, if the accommodation is provided for a period of less than a year, so much of that percentage of the net amount as is attributable to the period, less

(b) where the expenditure is incurred by a person other than the employee, so much as is properly attributable to the expenditure of any sum made good by the employee to that other.

(4) The net amount of the emoluments of a person's employment for the purposes of subsection (3) is the amount of those emoluments (leaving out of account the expenditure in question) after—

(a) any capital allowance, and

(b) any deductions allowable under Chapter I of Part VIII of the Taxes Act (Schedule E), section 208(1) of that Act (superannuation) or section 227(1) of that Act (retirement annuities) or section 21(4) or 22(2) of the [1970 c. 24.] Finance Act 1970 (approved pension schemes);

and, for the purposes of this subsection, in the case of employment by a company there shall be taken into account, as emoluments of the employment, the emoluments of any employment by an associated company.

(5) For the purposes of subsection (4), a company is an associated company of another if one of them has control of the other or both are under the control of the same person.”.

(2) This section has effect for the year 1977-78 and subsequent years of assessment.