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HMRC internal manual

Employment Income Manual

From
HM Revenue & Customs
Updated
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Living accommodation: avoidance area: co-ownership cases

Part 3 Chapter 5 ITEPA 2003

In these cases the employer and employee co-own the living accommodation. The usual arrangement is that the employer and employee own the property as tenants in common through a trust.

A tenant in common has a legal right to use 100% of the property 100% of the time even though a tenant in common may only own a much smaller interest in the property (say 30%). It is argued against us in such a case that the employee’s rights to use the living accommodation come from the employee’s legal rights as a tenant in common. So it is argued that no living accommodation has been provided by reason of the employment.

There are arguments to support a benefit charge within Part 3 Chapter 5 ITEPA 2003 in these cases and the strength of those arguments will depend on the facts of the case. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)