1105.This section gives details of the limited exemption for removal expenses. It sets out the general proposition that no liability to income tax arises in respect of any removal benefits or reimbursed removal expenses listed in this Chapter, up to the limit set out in section 287 of this Act. The section derives from parts of paragraph 1 of Schedule 11A to ICTA.
1106.Subsection (1) sets out the basic proposition that the exemption is available. The opening words of paragraph 1(1) of Schedule 11A, “where by reason of a person’s employment” have not been rewritten. Those words are not necessary because there is no tax charge in respect of benefits or reimbursed expenses unless they arise “by reason of a person’s employment”. The exemptions in this Chapter only apply where there is the possibility of such a charge.
1107.Subsection (2) reproduces the effect of the exclusion, by virtue of paragraph 1(1) of Schedule 11A, of certain income from the exemption because it is within Case III of Schedule E. Paragraph 2 of Schedule 11A ensures that the exemption from charge under Cases I and II of Schedule E does not result in the benefits or expenses being chargeable under Case III of Schedule E, as a result of the operation of section 131(2) of ICTA. In this Act, by virtue of the provisions that define “taxable earnings” for the purposes of Chapter 4 of Part 2, it is no longer possible for the same earnings to fall within one of those provisions and also within “taxable earnings” as defined for the purposes of Chapter 5 of Part 2. As a consequence there is no need to rewrite paragraph 2.
1108.Subsection (3) gives a signpost to the section containing the limit on the exemption.
1109.This section identifies the types of benefits and expenses that qualify for the exemption. It derives from paragraphs 3, 4, 7 and 16 of Schedule 11A to ICTA.
1110.Subsection (1) lists all the benefits potentially within the scope of the limited exemption set out in section 271. It gives signposts to the sections that contain the detailed descriptions of those benefits and states the overriding conditions that must be satisfied.
1111.Subsection (2) ensures that if a voucher or credit-token is used to obtain goods or services or money to pay for them such benefits are within the scope of the exemption. See Change 60 in Annex 1.
1112.Subsection (3) lists the types of expenses that qualify for the exemption. It relies largely on the list in subsection (1) and adds, in paragraph (c), one expense for which there is no corresponding benefit.
1113.One of the conditions for the exemption to be available is that the benefits must be provided or that the reimbursed expenses must be incurred on or before a particular day. In the source legislation that day is called the “relevant day” and is defined in paragraph 6 of Schedule 11A to ICTA. That label has been changed to “the limitation day”, which is defined in section 274 of this Act.
1114.This section gives more details about the three conditions referred to in section 272(1)(a). The section derives from paragraph 5 of Schedule 11A to ICTA. The words in brackets in paragraphs 5(1)(b) and (c) of Schedule 11A have not been reproduced, as they do not add anything.
1115.Subsection (1) introduces the three subsections that give details of the conditions.
1116.Subsection (2) identifies the three possible events that can trigger the exemption.
1117.Subsection (3) is concerned with the reason for the change of residence.
1118.Subsection (4) contains a restriction on the application of the exemption if a change of residence would be unnecessary.
1119.This section defines “the limitation day”, which rewrites the idea labelled “the relevant day” in ICTA, using a reference to a new concept, “the employment change”. The section derives from paragraph 6 of Schedule 11A to ICTA.
1120.Subsection (1) defines “the limitation day”, subject to subsection (2).
1121.Subsection (2) gives scope for the Inland Revenue to extend the period before the limitation day, if it seems reasonable to do so. The reference to “Inland Revenue” reflects the practice whereby the Board of Inland Revenue delegates the initial decision on this matter to the Officer in Charge of the local office concerned. See Change 158 in Annex 1.
1122.This section is pure drafting, which defines the new label “the employment change”.
1123.A number of the later paragraphs in Schedule 11A to ICTA refer to the circumstances set out in paragraph 5(1). The relevant change in those circumstances, now rewritten in section 273(2), has been given the label “the employment change” to make the rewriting of those references more straightforward.
1124.This section defines three labels related to the employee’s various possible residences, including a definition of “residence” itself. The section derives from section 191B(16) of ICTA and paragraph 25 of Schedule 11A to ICTA.
1125.In subsection (1) there is no longer a reference to an employee’s “sole or main residence”. Instead the residence in question is defined more closely as being the employee’s main residence.
1126.Subsection (2) defines “former residence” and “new residence”.
1127.Subsection (3) defines what is meant by “an interest in a residence”.
1128.This section combines two similar provisions and so cuts out duplication. It sets out the benefits and expenses associated with the acquisition of a residence that come within this Chapter. The same approach (of combining the rules for benefits and expenses) has been adopted in a number of the following sections. The section derives from paragraphs 9 (expenses) and 18 (benefits) of Schedule 11A to ICTA.
1129.Subsection (1) makes it clear that the interest in the new residence need not be held exclusively or indeed at all by the employee, provided it is held (either exclusively or jointly) by one or more members of the employee’s family or household.
1130.Subsection (2) identifies the types of benefit within the section.
1131.Subsection (3) identifies the types of expenses within the section, by building on the description of some of the benefits covered and adding those expenses where there is no equivalent benefit.
1132.Subsection (4) broadens the scope of who can raise a loan, other than or as well as the employee, in similar terms to those applying to an interest in the new residence covered in subsection (1).
1133.Subsection (5) defines terms used in subsection (3)(d).
1134.This section brings together in one section the provisions relating to expenses and benefits connected with an abortive acquisition of a new residence. It describes the circumstances that could lead to it being applied and relates back to section 277 to identify the type of benefits or expenses covered. The section derives from paragraphs 10 (expenses) and 19 (benefits) of Schedule 11A to ICTA.
1135.This section brings together in one section the provisions relating to expenses and benefits connected with the disposal of the employee’s former residence. The section derives from paragraphs 8 (expenses) and 17 (benefits) of Schedule 11A to ICTA.
1136.Subsection (1) describes the circumstances in which the section applies.
1137.Subsection (2) identifies the types of benefit within the section.
1138.Subsection (3) identifies the types of expenses within the section, by building on the description of some of the benefits covered and adding those expenses where there is no equivalent benefit.
1139.Subsection (4) broadens the scope of who can have an interest in the former residence, other than or as well as the employee, in similar terms to those applying to an interest in the new residence as covered in section 277(1), dealt with in paragraph 1129.
1140.Subsection (5) defines what is meant by “related loan” for the purposes of this section. This Act widens the scope of loans that qualify for exemption under this section. See Change 61 in Annex 1.
1141.This section brings together in one section the provisions relating to expenses and benefits connected with the transportation of belongings. It derives from paragraphs 11 (expenses) and 20 (benefits) of Schedule 11A to ICTA.
1142.Subsection (1) identifies the types of benefit within the section.
1143.Subsection (2) identifies the types of expenses within the section, by reference to the description of the benefits covered.
1144.Subsection (3) defines “domestic belongings” and “transportation”.
1145.This section brings together in one section the provisions relating to expenses and benefits connected with travelling and subsistence. It derives from paragraphs 12 (expenses), 21 (benefits) and 28 of Schedule 11A to ICTA.
1146.Subsection (1) identifies the types of benefit within the section. Subsection (1)(f) introduces a new label “education-linked living accommodation”. Subsection (1)(g) introduces a new label “the employee’s accommodation”. It also widens the scope of the exemption for travel to and from such accommodation. See Change 62 in Annex 1.
1147.Subsection (2) defines “education-linked living accommodation”.
1148.Subsection (3) defines “the employee’s accommodation”.
1149.Subsection (4) identifies the types of expenses within the section, by reference back to the description of the benefits covered.
1150.Subsection (5) identifies some exclusions from the exemptions provided by this section, by reference to circumstances described in subsequent sections.
1151.Subsection (6) defines “new duties”, “former area”, “new area”, “relevant child” and “subsistence”.
1152.This section identifies benefits and expenses that are excluded from the exemptions provided for in this Chapter. It derives from paragraphs 12(4) and 21(7) and (8) of Schedule 11A to ICTA.
1153.Subsection (1) states the general proposition about exclusion of certain benefits or expenses by reference to an amount being deductible under other provisions.
1154.Subsection (2) identifies those provisions.
1155.Subsection (3) deals with the circumstance where a deduction might be allowed for only part of a benefit provided. In that case the other part of the benefit might still be exempt.
1156.This section provides that the exemption does not apply to car or van benefits. It derives from paragraphs 21(2) and (4) to (6) of Schedule 11A to ICTA.
1157.Subsection (1) provides that the exemption in section 281(1) does not apply to car or van benefits. The Act widens the scope of the exemption when compared with a strict interpretation of the source legislation. See Change 63 in Annex 1.
1158.Subsection (2) identifies the sections containing the definitions of the terms used in subsection (1).
1159.This section deals with bridging loan expenses (interest) connected with an employee’s change of residence resulting from an employment change. It derives from paragraph 13 of Schedule 11A to ICTA.
1160.Subsection (1)(a) combines the first two conditions that the bridging loan must satisfy, which are in paragraph 13(1)(a) and (b) of Schedule 11A. Subsection (1)(b) and (c) list the other conditions.
1161.Subsection (2) gives a restricted definition of interest that falls within the section. Paragraphs 13(4) and (5) of Schedule 11A set out the purpose for which the loan must have been used. The Act combines those provisions without any change in effect. The same change as described in paragraph 1140 in relation to section 279 has been made here. See Change 61 in Annex 1.
1162.Subsection (3) places a further restriction on the amount of interest that can come within the section.
1163.The source legislation does not specify how to allocate the total loan interest between exempt and non-exempt parts of the loan where paragraph 13(3) and (4) of Schedule 11A both apply. Subsection (4) recognises that possibility by introducing the idea of “the appropriate fraction”. See Change 64 in Annex 1.
1164.Subsection (5) includes a method statement to explain how to arrive at the appropriate fraction. See Change 64 in Annex 1.
1165.Subsection (6) combines in one subsection the provisions from paragraph 13(7) of Schedule 11A that extend the meaning of interest payable by an employee and paragraph 13(8) of Schedule 11A that apply a parallel extension in meaning to references to a loan being raised by the employee.
1166.This section brings together in one section the provisions relating to expenses and benefits connected with replacing domestic goods. The heading in the source legislation, “duplicate expenses”, does not really describe what this provision is about. The new heading is more informative. The section derives from paragraphs 14 (expenses) and 22 (benefits) of Schedule 11A to ICTA.
1167.Subsection (1) describes the circumstances in which the section operates. Under paragraph 14(2) of Schedule 11A if an employee sells any of the domestic goods replaced by the new goods covered by paragraph 14(1) of Schedule 11A, the sale proceeds have to be deducted from the amount that qualifies under that paragraph. This subsection does not reproduce that requirement to deduct the sale proceeds of replaced domestic goods. See Change 65 in Annex 1.
1168.Subsection (2) broadens the scope of who can have an interest in the new and/or former residence(s), other than or as well as the employee, in similar terms to those applying to an interest in the new residence as covered in section 277(1), dealt with in paragraph 1129.
1169.This section brings together the provisions dealing with the Treasury’s regulation-making powers. It derives from paragraphs 15 (expenses) and 23 (benefits) of Schedule 11A to ICTA.
1170.Subsection (1) provides powers that allow the Treasury to make regulations to extend sections 279 to 285 to bring within their scope benefits or expenses not otherwise covered.
1171.Subsections (2) and (3) allow the Treasury some latitude in what they may do and how they may do it.
Subsection (4) prevents the Treasury from making retrospective regulations under the powers in this section.
1172.This section sets out the limit on the total amount of the exemption available under this Chapter. It derives from paragraph 24 of Schedule 11A to ICTA.
1173.Subsection (1) states the limit that applies to the amount of benefits and expenses that can be exempted.
1174.Subsection (2) includes a list of items that count towards the £8,000 limit. Subsection (2)(b) states that the benefit code earnings, which in this Act includes amounts related to the use of vouchers and/or credit-tokens, are to be counted towards the value of the exemption. See Change 60 in Annex 1.
1175.Subsection (3) explains what is meant in subsection (2) by “the section 62 earnings”.
1176.Subsection (4) explains what is meant in subsection (2) by “the benefits code earnings”. In combination with subsection (2)(b) it prevents any possible double counting of an amount. See Change 66 in Annex 1.
1177.The source provisions also go into great detail about how to quantify the amount of benefit relating to the provision of living accommodation in paragraph 24(4) to (8) of Schedule 11A. Subsection (5) amalgamates all that detail. It brings together the various permutations for the computation of amounts chargeable in such cases.
1178.This section gives details of what kind of loan is covered. It contains a formula for working out the day by which the loan must be repaid if there is to be no charge to tax under what was section 160 of ICTA (rewritten in Chapter 7 of Part 3 of this Act, mainly in section 175). It also includes some interpretative provisions. The section derives from section 191B(1) to (6), (10) to (12) and parts of (8), (9) and (13) of ICTA.
1179.Subsection (1) describes the circumstances in which the exemption arises.
1180.Subsection (2) describes in what circumstances a loan is within the term “a removal benefit” as used in subsection (1).
1181.Subsection (3) describes how there can be “unused removal benefit exemption” as mentioned in subsection (1).
1182.Subsection (4) shows how to calculate the amount of “the exempted loan discharge period”, as mentioned in subsection (1).
1183.Subsection (5) broadens the scope of who can raise a loan that qualifies for the exemption. Similarly it broadens who can have an interest in the new and/or former residence(s), other than, or as well as, the employee. It does that in similar terms to those applying to an interest in the new residence as covered in section 277(1), dealt with in paragraph 1129.
1184.Subsection (6) provides for the tax payable to be decided on a provisional basis, should the whole circumstances surrounding the loan not be known at the time the need to make a decision arises.
1185.This section provides a measure of relief for those loans that do not qualify under the provisions of the section 288. It derives from section 191B(8) and (13) of ICTA.
1186.Subsection (1) describes the circumstances in which this section applies.
1187.An employee who has a bridging loan that would otherwise come within the provisions of the preceding section may not repay that loan until after the day determined by the formula set out in section 288(4). If so, the employee would not come within the exemption now set out in that section. In such a case the employee’s liability in respect of the beneficial loan under section 175 of this Act is worked out as if the loan had been made on the day determined by that formula. Subsection (2) rewrites the corresponding provision from the source legislation.
1188.Subsection (3) maintains the position in the source legislation whereby that extension only applies to those matters covered by what was section 160 of ICTA and not to the matters covered by what was section 161 of ICTA.
1189.Subsection (4) provides for the tax payable to be decided on a provisional basis, should the whole circumstances surrounding the loan not be known at the time the need to make a decision arises.