Q&A: Tax free rent for seconded employees

Q. We have an employee currently seconded from our EU-based parent company. Initially, he was due to be with us for 18 months, twelve of which have already elapsed. We are paying for a flat for him on the basis that it is a temporary workplace, so not taxable on him. We are considering extending his stay for a further 18 months, as he has made a very positive contribution. Are we able to continue paying the rent on the flat tax free until two years has elapsed?

A: A workplace is only "temporary" as far as the expectation is that it will be the workplace for less than two years. If you decide that you are going to extend the secondment beyond two years, the trigger date for the rent payments becoming a taxable benefit is the date that decision is made, because it can no longer be said that the expectation is that your site will be the workplace for less than two years.

Further information about the secondment of employees to the UK can be found in HMRC’s Employment Income Manual.

About the Author

Martin Johnson

Partner

With expertise in advising family-owned companies on a range of tax, accountancy and business issues, Martin also has an in-depth knowledge of the automotive and property sectors. In addition, he provides advice on inheritance tax planning and financial management to owner-managed businesses.  Martin leads the firm in developing its expertise in the buy-to-let sector, advising both residential and commercial property owners on relevant tax and legislation issues. A further element to Martin’s role is to build Torgersens’ relationships with banks, financial advisors and specialists in commercial and employment law to ensure that the firm’s clients have access to market-leading guidance.  

To get in touch please e-mail martin.johnson@torgersens.com.