Relocation v. Commute

[Unregistered]

Am looking at a situation where my employer needs to send me on a 6-mth assignment to another part of the country. We are collectively (employer and employee) looking at options here to cover my additional expenses and to do so in a tax compliant way.

Some complicating factors ...

1) The company owns a house in the vicinity of the new assignment and can make it available to me and my family on a non-exclusive basis. The house would command rent on the open market in excess of what I would ordinarily pay for accommodation suitable to my needs. We are just looking to do what makes sense ... occupy an otherwise mostly empty property.

2) I intend to move my family and relinquish the current property we are renting, so I would not otherwise have a principal residence.

We want to proceed with this in a way that does not erode any profit the company will make on the assignment and which will not leave me with a significant BIK bill.

If we can not relocate in a financially viable way, then commuting Mon-Fri is the other option, but much less desirable from a family perspective.

I know this is quite complicated, but if anyone out there has worked out a tax compliant way of facilitating medium term relocation like this, it would be great.

 

[Imperator]

You have a number of options, the first two of which you have mentioned:

If the employer provides you with a house you will pay BIK, this will be based on either 8% of the market value of the house, or an a confirmed auctioneers estimate of the rent the house. This is a good guide.

If you drive to and from work from your existing residence, you can claim mileage at the rates listed here.

Your third option is to keep your current address, move to another place close to your work (although not owned by the employer) and claim overnight subsistence. You could also claim mileage on weekend travel to / from work. Subsistence rates are listed here. This option would be nice as the subsistence would be tax free.