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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Living accommodation: property costing £75,000 or less: measure of benefit under Section 105 ITEPA 2003

Section 105(2) ITEPA 2003

The amount of the benefit depends on the cost of the property (see EIM11428).

This page summarises the cash equivalent of the benefit where the living accommodation cost the provider £75,000 or less. The amount of earnings under Section 105 ITEPA 2003 is:

  • the greater of

    • the annual value for the taxable period of the accommodation provided and
    • the rent paid for the taxable period by the person providing it

less 

  • any rent paid for it for the taxable period by the employee.

For the meaning of annual value see EIM11432.

For the meaning of taxable period see EIM11428.

For what cost to the provider means see EIM11429.

For an example of how the benefit is calculated under Section 105 see example EIM11442.

Where the living accommodation cost the provider more than £75,000 the cash equivalent of the benefit is calculated under Section 106 ITEPA 2003 (see EIM11480). Remember the possibility of a further benefit on the provision of accommodation services such as heat and light (see EIM11521).

Section 71 Finance Act 2009 amended Section 105 in relation to leases entered into on or after 22 April 2009 or existing leases extended on or after that date. These changes provide for an amount in respect of a lease premium to be attributed to the taxable period. See EIM11444 for an overview of the FA 2009 changes.