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Income Tax (Earnings and Pensions) Bill


Income Tax (Earnings and Pensions) Bill
Part 4 — Employment income: exemptions
Chapter 7 — Exemptions: removal benefits and expenses

    134

 

 273   Conditions applicable to change of residence

     (1)    The conditions referred to in section 272(1)(a) and (3)(a) which apply to the

change of the employee’s residence are conditions A to C.

     (2)    Condition A is that the change of residence results from one of the following

changes—

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           (a)           the employee becoming employed,

           (b)           an alteration of the duties of the employment, or

           (c)           an alteration of the place where the employee is normally to perform

those duties.

     (3)    Condition B is that the change of residence is made wholly or mainly to allow

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the employee to reside within a reasonable daily travelling distance of the

place where the employee normally performs or is normally to perform the

duties of the employment after the employment change (see section 275).

     (4)    Condition C is that the employee’s former residence is not within a reasonable

daily travelling distance of that place.

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 274   Meaning of “the limitation day”

     (1)    In this Chapter “the limitation day”, in relation to an employee’s change of

residence, means the last day of the tax year after that in which the employee

begins to perform the duties of the employment after the employment change,

but this is subject to any direction under subsection (2).

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     (2)    The Inland Revenue may direct that the last day of a later tax year is the

limitation day in relation to any particular change of residence if it appears to

them reasonable to do so having regard to all the circumstances of that change.

 275   Meaning of “the employment change”

In this Chapter “the employment change”, in relation to an employee’s change

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of residence, means whichever of the changes specified in section 273(2) results

in the change of residence.

 276   Meaning of “residence”, “former residence” and “new residence” etc.

     (1)    If an employee has more than one residence, references in this Chapter to the

employee’s residence are references to the employee’s main residence.

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     (2)    In this Chapter, in relation to a change of the employee’s residence—

           (a)           references to the former residence are references to the employee’s

residence before the change, and

           (b)           references to the new residence are references to the employee’s

residence after the change.

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     (3)    In this Chapter references to an interest in a residence are, in the case of a

building, references to an estate or interest in the land concerned.

 

 

Income Tax (Earnings and Pensions) Bill
Part 4 — Employment income: exemptions
Chapter 7 — Exemptions: removal benefits and expenses

    135

 

Benefits and expenses within this Chapter

 277   Acquisition benefits and expenses

     (1)    This section applies if an interest in the employee’s new residence is acquired

by—

           (a)           the employee,

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           (b)           one or more members of the employee’s family or household, or

           (c)           the employee and one or more members of the employee’s family or

household.

     (2)    The following benefits are within this section—

           (a)           legal services connected with the acquisition of the interest, including

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legal services connected with any loan raised by the employee to

acquire it,

           (b)           the waiving of any procurement fees connected with any such loan,

           (c)           the waiving of any amount payable in respect of insurance effected to

cover risks incurred by the maker of any such loan because the loan

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equals the whole, or a substantial part, of the value of the interest,

           (d)           any survey or inspection of the residence undertaken in connection

with the acquisition, and

           (e)           the connection of any utility serving the new residence for use by the

employee or by the employee and one or more members of the

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employee’s family or household.

     (3)    The following expenses are within this section—

           (a)           sums paid for any services within subsection (2)(a), (d) or (e),

           (b)           any procurement fees connected with any loan raised by the employee

to acquire the interest,

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           (c)           the costs of any insurance within subsection (2)(c),

           (d)           fees payable to an appropriate registry or appropriate register in

connection with the acquisition, and

           (e)           stamp duty charged on the acquisition.

     (4)    In this section references to a loan raised by the employee include a loan raised

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by—

           (a)           one or more members of the employee’s family or household, or

           (b)           the employee and one or more members of the employee’s family or

household.

     (5)    In this section—

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                    “appropriate registry” means—

                  (a)                                     Her Majesty’s Land Registry,

                  (b)                 the Land Registry in Northern Ireland, or

                  (c)                 the Registry of Deeds for Northern Ireland, and

                    “appropriate register” means any register under the management and

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control of the Keeper of the Registers of Scotland.

 278   Abortive acquisition benefits and expenses

Benefits or expenses are within this section if—

           (a)           they are benefits provided or expenses incurred with a view to the

acquisition of an interest in a residence,

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Income Tax (Earnings and Pensions) Bill
Part 4 — Employment income: exemptions
Chapter 7 — Exemptions: removal benefits and expenses

    136

 

           (b)           the interest is not acquired—

                  (i)                 because of circumstances outside the control of the person

seeking to acquire it, or

                  (ii)                because that person reasonably declines to proceed, and

           (c)           the benefits or expenses would have fallen within section 277 if the

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interest had been acquired.

 279   Disposal benefits and expenses

     (1)    This section applies if the employee has an interest in the former residence and

because of the change of residence it is disposed of or is intended to be

disposed of.

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     (2)    The following benefits are within this section—

           (a)           legal services connected with the disposal or intended disposal,

including legal services connected with the redemption of a related

loan,

           (b)           the waiving of any penalty for redeeming a related loan for the purpose

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of the disposal or intended disposal,

           (c)           the services of an estate agent or auctioneer engaged in the disposal or

intended disposal,

           (d)           services connected with the advertisement of the disposal or intended

disposal,

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           (e)           the disconnection, for the purpose of the disposal or intended disposal,

of any utility serving the former residence, and

           (f)           services connected with maintaining, insuring, or preserving the

security of, the former residence at any time when it is unoccupied

pending the disposal or intended disposal.

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     (3)    The following expenses are within this section—

           (a)           sums paid for any services within subsection (2)(a), (c), (d) or (e),

           (b)           any penalty for redeeming a related loan for the purpose of the disposal

or intended disposal,

           (c)           rent paid in respect of the former residence at any time when it is

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unoccupied pending the disposal or intended disposal, and

           (d)           expenses of maintaining, insuring, or preserving the security of the

former residence at any time when it is unoccupied pending the

disposal or intended disposal.

     (4)    In this section references to the employee having an interest in a residence

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include—

           (a)           one or more members of the employee’s family or household having

such an interest, or

           (b)           the employee and one or more members of the employee’s family or

household having such an interest.

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     (5)    A loan is a “related loan” for this purpose if—

           (a)           it was raised to obtain an interest in the former residence, or

           (b)           it is secured on such an interest, or

           (c)           part of it was so raised and the rest of it is so secured.

 

 

Income Tax (Earnings and Pensions) Bill
Part 4 — Employment income: exemptions
Chapter 7 — Exemptions: removal benefits and expenses

    137

 

 280   Transporting belongings

     (1)    The following benefits are within this section—

           (a)           the transportation of domestic belongings from the employee’s former

residence to the employee’s new residence, and

           (b)           the effecting of insurance to cover such transportation.

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     (2)    The following expenses are within this section—

           (a)           expenses connected with such transportation, and

           (b)           the costs of any such insurance.

     (3)    In this section—

                    “domestic belongings” means belongings of the employee or of members

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of the employee’s family or household, and

                    “transportation” includes—

                  (a)                 packing and unpacking belongings,

                  (b)                                     temporarily storing them, where there is not a direct move from

the former to the new residence,

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                  (c)                 detaching domestic fittings from the former residence, where

they are to be taken to the new residence, and

                  (d)                 attaching domestic fittings to the new residence and adapting

them, where they are brought from the former residence.

 281   Travelling and subsistence

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     (1)    The following benefits are within this section—

           (a)           subsistence and facilities for travel provided for the employee and

members of the employee’s family or household for temporary visits to

the new area for purposes connected with the change of residence,

           (b)           any other subsistence provided for the employee,

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           (c)           facilities provided for the employee for travel between the employee’s

former residence and—

                  (i)                 the place where the employee’s new duties are normally

performed, or

                  (ii)                the new place where the duties of the employee’s employment

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are normally performed, or

                  (iii)               temporary living accommodation of the employee,

           (d)           where the employment change is within section 273(2)(b) or (c) (change

of duties or place of performance), facilities provided for the employee

for travel before the change between the employee’s new residence

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and—

                  (i)                 the place where the employee normally performs the duties of

the employment before the change, or

                  (ii)                temporary living accommodation of the employee,

           (e)           facilities provided for the employee and members of the employee’s

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family or household for travel from the employee’s former residence to

the employee’s new residence in connection with the change of

residence,

           (f)           subsistence provided for a relevant child while the child stays in

education-linked living accommodation,

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           (g)           facilities provided for a relevant child for travel between education-

linked living accommodation and the employee’s accommodation.

 

 

Income Tax (Earnings and Pensions) Bill
Part 4 — Employment income: exemptions
Chapter 7 — Exemptions: removal benefits and expenses

    138

 

     (2)    For the purposes of this section, “education-linked living accommodation”, in

relation to a relevant child, means living accommodation where the child stays

for the purpose of securing continuity in education, being—

           (a)           accommodation in the new area where the child stays before the

employee’s change of residence,

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           (b)           accommodation in the former area where the child stays after that

change,

           (c)           accommodation in the new area where the child stays while the

employee is living in temporary living accommodation in the former

area, or

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           (d)           accommodation in the former area where the child stays while the

employee is living in temporary living accommodation in the new area.

     (3)    For the purposes of subsection (1)(g) “the employee’s accommodation”, in

relation to travel to or from education-linked accommodation, means—

           (a)           if that accommodation is within subsection (2)(a), the employee’s

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former residence,

           (b)           if that accommodation is within subsection (2)(b), the employee’s new

residence, and

           (c)           if that accommodation is within subsection (2)(c) or (d), the employee’s

temporary accommodation.

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     (4)    The cost of providing subsistence or travel of a kind described in subsection (1)

is an expense within this section.

     (5)    Subsections (1) and (4) are subject to section 282 (exclusion from this section of

benefits or expenses where deduction allowed), and subsection (1) is also

subject to section 283 (exclusion from this section of taxable car and van

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facilities).

     (6)    In this section—

                    “new duties” means—

                  (a)                 if the employment change is within section 273(2)(a) (change of

employer), the duties of the employee’s new employment, and

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                  (b)                                     if the employment change is within section 273(2)(b) (change of

duties), the new duties of the employment,

                    “former area” means the area round or near the former residence of the

employee,

                    “new area” means—

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                  (a)                 if the employment change is within section 273(2)(a) or (b)

(change of employer or duties), the area round or near the place

where the employee’s new duties normally are or are to be

performed, and

                  (b)                                     if the employment change is within section 273(2)(c) (change of

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place of performance), the area round or near the new place

where the duties of the employee’s employment normally are

or are to be performed,

                    “relevant child” means a person who is a member of the employee’s

family or household and is aged under 19 at the beginning of the tax

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year in which the employment change occurs, and

                    “subsistence” means food, drink and temporary living accommodation.

 

 

 
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