Under the Income Tax Act
1994 where an individual received accommodation in connection
with their employment, and was maintaining a home elsewhere
(occupied by family or left vacant), no amount was taxable to
the employee. This was the case whether it was accommodation
directly provided or via an accommodation allowance.
The above treatment was on the basis
that in these cases, individuals are not viewed as receiving a
benefit. That is, the market value / value of the benefit is nil
if an individual is incurring the costs of maintaining a home
elsewhere. In terms of determining whether accommodation was
taxable, the relevant legislative provisions referred to the
market value of the benefit (historically also the value of the
benefit), rather than the value of the accommodation itself.
This approach was part of a longstanding
accepted filing position by the Inland Revenue evidenced
directly from their historic Technical Rulings. Evidence of this
position can still be found on Inland Revenue's website in
industry guidelines for the Screen Production Industry:
"If you have accommodation expenses and you maintain your own
home in your home town at your own expense, any accommodation
allowance you receive while you are away is not considered
income and is not taxable."
