Employee Accommodation a Business Asset

A Chinese restaurant which provided a residential property for use as accommodation for employees as part of their contracts of employment has persuaded the First-tier Tribunal that the house was a business asset for the purposes of ‘taper relief’ for Capital Gains Tax (CGT).

Although taper relief has now been abolished, the concept of a business asset is important for claiming reliefs against CGT and Inheritance Tax, and for deductions from profits assessable to Income Tax and Corporation Tax.

It remains to be seen whether this decision will be used to justify tax deductions against other capital taxes.