Finance Act 2003

59 Relocation relief U.K.

(1) Where a dwelling is acquired from an employee (whether alone or with other individuals) by the employer or a relocation company, the acquisition is exempt from charge if—

(a) the individual occupied the dwelling as his only or main residence at some time in the period of one year ending with the date of the acquisition,

(b) the acquisition is made in connection with a change of residence by the individual resulting from relocation of employment,

(c) the consideration for the acquisition does not exceed the market value of the dwelling, and

(d) the area of land acquired does not exceed the permitted area.

(2) Where the conditions in subsection (1)(a) to (c) are met but the area of land acquired exceeds the permitted area, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the dwelling.

(3) “Relocation of employment” means a change of the individual’s place of employment due to—

(a) his becoming an employee of the employer,

(b) an alteration of the duties of his employment with the employer, or

(c) an alteration of the place where he normally performs those duties.

(4) A change of residence is one “resulting from” relocation of employment if—

(a) the change is made wholly or mainly to allow the individual to have his residence within a reasonable daily travelling distance of his new place of employment, and

(b) the individual’s former residence is not within a reasonable daily travelling distance of that place.

The employee’s “new place of employment” means the place where he normally performs, or is normally to perform, the duties of his employment after the relocation.

(5) “Relocation company” means—

(a) a company carrying on a business consisting of or including provision of the service of acquiring dwellings in connection with a change of residence resulting from relocation of employment, or

(b) a company connected with such a company.

Section 839 of the Taxes Act 1988 (connected persons) applies for the purposes of paragraph (b).

(6) “Dwelling” includes land occupied and enjoyed with the dwelling as its garden or grounds.

(7) The “permitted area”, in relation to a dwelling, means land occupied and enjoyed with the dwelling as its garden or grounds that does not exceed—

(a) an area (inclusive of the site of the dwelling) of 0.5 of a hectare, or

(b) such larger area as is required for the reasonable enjoyment of the dwelling as a dwelling having regard to its size and character.

(8) Where subsection (7)(b) applies, the permitted area is taken to consist of that part of the dwelling that would be the most suitable for occupation and enjoyment with the dwelling as its garden or grounds if the rest of the land were separately occupied.

(9) In this section—

(a) references to the acquisition of the dwelling are to the acquisition, by way of transfer, of a major interest in the dwelling;

(b) references to the market value of the dwelling, or of an area of land, are to the market value of the major interest in the dwelling, or of that interest so far as it relates to the area in question;

(c) references to an employee include a prospective employee (and references to the employer are to be construed accordingly).

Commencement Information

I1 Pt. 4 wholly in force at Royal Assent subject to Sch. 19, see s. 124, Sch. 19 para. 1(1)