Company to give housing allowance - tax treatment & PPR issue

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jrewing

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I have been offered a new position in a different part of the country, which would require me to move with family.

As the contract is for 2 years only, I will not sell my current house (nor will I rent it out). The company will provide me with a housing rental allowance to cover house rental.

I have a couple of questions about this situation:

1. Should the housing rental allowance be taxable ? Can it really be considered a BIK, when I already own a house, which I will use most weekends, and will not be rented out? In effect, I do not derive a material benefit from the allowance, it is more an accommodation expense for a fixed timeframe.

2. Which house will be regarded as my PPR? Does it matter? (I am in first house for 2 yrs, mortgage paid off).
 
AFAIK, your current house will still be regarded as your PPR for CGT purposes provided that your move is as a condition of your employment, your absence is for less than 4 years and that you occupy it as your PPR both before and after.
 
Thanks for your input Lorraine. Does this mean that if circumstances and I do not return to my current house, if I sell it in, say, 6 yrs time, I will be liable for CGT? If so, will this gain be calculated using the original purchase price or the value of when I leave.

Am I right in assuming that I will not be liable for SD clawback as long as I never rent it out ?

Also, does anybody have an opinion on whether my rental allowance will be taxable ?
 
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