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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Living accommodation: properties costing more than £75,000

Section 106 ITEPA 2003 and Extra-Statutory Concession A91

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

For the definition of the cost of providing the living accommodation see EIM11429.

This page relates to living accommodation that cost the provider more than £75,000. If the cost of the accommodation exceeds £75,000, then the amount of the cash equivalent is calculated in accordance with Section 106 ITEPA 2003.

There is one exception. If the annual value is based on the open market rental, then Extra- Statutory Concession A91 applies. Under ESC A91 the cash equivalent of the benefit is restricted to step 1 of Section 106(2) ITEPA 2003. The amount of earnings under step 1 is the same figure as that calculated under Section 105 for properties which cost £75,000 or less (see EIM11431).

ESC A91 usually applies to properties outside the United Kingdom (see EIM11440).

ESC A91 does not apply where the cash equivalent is calculated by reference to a lease premium under the changes introduced by Section 71 FA 2009 (see EIM11444). 

If it appears that the property cost more than £75,000 then the first thing to decide is whether the cost basis or the market value basis will be used to calculate the cash equivalent of the benefit (see EIM11473).