Finance (No. 2) Act 1992

Introduction

1 Paragraphs 2 to 8 below apply for the purposes of this Schedule.

2 (1) An individual is a qualifying individual for a year of assessment if apart from this Schedule he would be chargeable for the year to income tax under Case I or Case VI of Schedule D (or both those Cases) in respect of all relevant sums accruing to him in respect of a qualifying residence or qualifying residences; and it is immaterial whether the sums are treated for income tax purposes as derived from one source or from two or more separate sources.

(2) Relevant sums are sums accruing in respect of the use of furnished accommodation in the residence or any of the residences or in respect of relevant goods or services supplied in connection with that use.

(3) In a case where—

(a) the individual is chargeable for the year to income tax in respect of sums falling within sub-paragraph (4) below, and

(b) any of those sums are treated for income tax purposes as derived from a source mentioned in sub-paragraph (1) above,

the individual is not a qualifying individual for the year (if he would be apart from this sub-paragraph).

(4) Sums fall within this sub-paragraph if they are not relevant sums accruing to the individual in respect of the residence or residences.

3 As regards a year of assessment a period is a basis period for a source mentioned in paragraph 2(1) above if it is a period on whose profits or gains income tax for the year falls to be finally computed in respect of the source.

4 A residence is a qualifying residence if it is the individual’s only or main residence at any time in any period which as regards the year of assessment concerned is a basis period for a source mentioned in paragraph 2(1) above.

5 (1) This paragraph applies to determine an individual’s limit for a year of assessment.

(2) Subject to the following provisions of this paragraph, the limit is the basic amount for the year.

(3) For the purposes of sub-paragraph (4) below a relevant period is—

(a) any period which as regards the year is a basis period for a source mentioned in paragraph 2(1) above;

(b) any period of one year which begins at the same time as any period which is less than one year and falls within paragraph (a) above;

(c) any period of one year which ends at the same time as any period which is less than one year and falls within paragraph (a) above.

(4) In a case where—

(a) at any time in a relevant period sums accrue to a person or persons other than the individual in respect of the use of residential accommodation in the residence or any of the residences, or in respect of relevant goods or services supplied in connection with that use, and

(b) at that time the residence concerned is the individual’s only or main residence,

the limit is the amount equal to half the basic amount for the year.

6 The basic amount for a year of assessment is—

(a) such sum as may be specified for the year by order made by the Treasury;

(b) £3,250 if no sum is so specified.

7 “Residence” means a building, or part of a building, occupied or intended to be occupied as a separate residence, or a caravan or house-boat; but a building, or part of a building, which is designed for permanent use as a single residence shall be treated as a single residence notwithstanding that it is temporarily divided into two or more parts which are occupied or intended to be occupied as separate residences.

8 Relevant goods and services are meals, cleaning, laundry and goods and services of a similar nature.