Living accommodation for a related person

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I've recently faced a case where a client bought a property though the company where her spouse resides. I was wondering if the client, who is a director receiving dividends should declare a living accomodation benefit on her P11D or it should be on her spouse's? The spouse is not an employee of the company and has got other job. Thank you.

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By More unearned luck
04th Jun 2024 17:19

I've never heard of a case where a spouse resided in a company. What does 'client bought a property though the company' mean? Possible meanings include:

*Your client bought the property with a loan from 'the' company
*Your client bought the property (ie is the BO) but it is registered in the name of 'the' company (ie it is the legal owner and nominee for the client)
*Your client didn't buy the property (it was bought by the company)

Only the last of these is likely to give rise to BIK, if the 'spouse' pays no or insufficient rent for the house and any company supplied contents.

Why isn't your client living with her 'spouse' ?

Whatever the client has done, she did without taking any advice?

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Replying to More unearned luck:
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By hjklil
04th Jun 2024 17:35

Thank you for your reply.
It was a part of my assignment where the discussion was quite intensive therefore I’m looking for an answer and luckily no client hasn’t done anything without any advice!
The property was bought by a company and the spouse doesn’t reside in the same city (whatever the reason is). The problem we faced was: does the benefit go to the director’s P11D or the company should issue one to the spouse.

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Replying to hjklil:
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By Justin Bryant
05th Jun 2024 11:15

You tax the employee/director, not the non-employee/non-director, like with remittances by relevant persons, where you tax the relevant non-dom, not the relevant person.

This stems (I think) from the (historical) fact that such taxable income is supposed to have a source in order to be taxable in the first place, and the spouse does not have such a source, but the employee/director does i.e. their paying job.

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By Tax Dragon
05th Jun 2024 13:02

Read in isolation (or perhaps alongside EIM20505), Reg 95 seems to apply.

To my mind that leads to a nonsense.

Interesting question.

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