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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Living accommodation exemption: directors

Section 99(3) ITEPA 2003

Directors do not usually qualify for the Section 99(1) ITEPA 2003 exemption (see EIM11341) or the Section 99(2) exemption (see EIM11346). Where a person who would otherwise qualify for this exemption is provided with living accommodation by a company (or an associated company) of which the person is a director there will be no exemption unless:

  • the person has no material interest in the company (see EIM20212) and
  • one of the following applies:

    • the person is a full-time working director of the company (see EIM20202onwards), or
    • the company is non-profit making (see EIM20210), or
    • the company is established for charitable purposes only (see EIM20211).

The conditions have to be satisfied in respect of the director’s employment with the company providing the accommodation and the director’s employment with any associated company. Companies are associated if one has control of the other or both are under the control of the same person. Control is defined in Section 840 ICTA 1988 (see EIM20213).

Where a company claims to be a charity and no ruling has been received, submit the case to HMRC Charities (Bootle), or for cases in Scotland, HMRC Charities (Edinburgh).