Living accommodation: housing for key workers: shared ownership
For information on the scheme for Key Housing and the Starter Homes Initiative, see EIM21735.
A tax liability may arise with shared ownership. If the employer owns part of the property then there is a benefit. If a third party, such as a RSL, owns part of the property and the property is provided by reason of the employment, then there is a benefit. (See EIM11408 for guidance on “by reason of the employment”.)
The amount of earnings is related to the share in the property, which the employee does not own.
Sixty per cent of the property is owned by the key worker and 40% by a third party e.g. RSL or employer, the share in the property cost the employer, RSL etc less than £75,000, the GRV of the property is £1,200.
If the key worker pays rent of £480 or more per year then the benefit is extinguished.
If the share in the property cost the employer, RSL etc more than £75,000 the amount of the benefit is calculated in accordance with S106 ITEPA 2003.
The facts are the same as above but the RSL spent £90,000 in buying a 40% interest in the property in May 2004.
(See EIM11480 for information on how to calculate the benefit.)
|Cost of accommodation||£90,000|
|Additional yearly rent of||£15,000 × 5% =||£750|
|Plus S105 benefit (GRV) (£1,200 × 40%)||£480|
If the worker pays rent of £1,230 or more a year then the benefit is extinguished.