INCOME TAX ACT 1967 (ACT 53) PART III - ASCERTAINMENT OF CHARGEABLE INCOME Chapter 4- Adjusted income and adjusted loss
Section 38. Special provisions applicable to adjusted income from an employment.
(1) Subject to this section-
(a) where an employee's gross income from an employment includes for the basis period for a year of assessment any amount ascertained in accordance with subsection 32 (1) in respect of any benefit or amenity consisting of furniture provided by or on behalf of his employer in conjunction with living accommodation, there may be deducted from that gross income the amount of any rent payable by that employee for that period for that accommodation and furniture, less the amount of any deduction made in respect of that rent under paragraph (b); and
(b) where an employee's gross income from an employment includes for the basis period for a year of assessment any amount ascertained in accordance with subsection 32 (2) or (3) in respect of living accommodation provided by or on behalf of his employer, there may be deducted from that gross income expenses of the following kind:
(i) the amount of any public rates or insurance premiums payable by the employee in respect of that accommodation for that period;
(ii) any expenses of the kind mentioned in section 37 (1) (c) which the employee, pursuant to the terms on which that accommodation is so provided, is legally bound to meet in respect of that accommodation during that period;
(iii) where the accommodation is provided unfurnished, any rent payable by the employee for that accommodation for that period;
(iv) where the accommodation is provided furnished and is held by or on behalf of the employer on lease at what would be an economic rent if so much of the rent as relates to the furniture were to be disregarded, so much of any rent payable by the employee for that period as bears to the whole of the rent so payable the same proportion as the economic rent of the accommodation bears to the rent payable by or on behalf of the employer for that period; and
(v) where the accommodation is provided furnished and subparagraph (iv) does not apply, so much of any rent payable by the employee for that period as bears to the whole rent so payable the same proportion as the defined value of the accommodation bears to the aggregate of the economic rent for that period and the rent for that period appropriate to the market value of the furniture provided in conjunction with that accommodation.
(2) Where living accommodation is provided for only part of a basis period, the expenses referred to in paragraph (1)(b) shall be restricted to such of those expenses as are payable for that part under that subsection or as are bound to be met during that part under that subsection, as the case may be.
(3) The total amount deducted under this section from an employee's gross income from an employment for the basis period for a year of assessment shall not exceed the total of the amounts included in that gross income-
(a) by virtue of subsection 32 (1) in respect of any benefit or amenity consisting of furniture provided by or on behalf of an employer in conjunction with living accommodation; and
(b) by virtue of subsection 32 (2) or (3).
(4) Where an employee's gross income from an employment includes for the basis period for a year of assessment any amount ascertained in accordance with subsection 32 (2) or (3) in respect of living accommodation provided by or on behalf of his employer, any expense to which subparagraph (1)(b)(ii) applies in relation to that basis period (or a part of that basis period) shall, if it is payable for a period which overlaps that basis period or that part, be apportioned in the manner provided by paragraph 37 (3) (b); and for the purposes of this section regard shall be had only to so much of that expense as is so apportioned to that basis period or that part.
(5) Where any amount is included in gross income-
(a) by virtue of subsection 32 (1) in respect of any benefit or amenity consisting of furniture provided by or on behalf of an employer in conjunction with living accommodation; or
(b) by virtue of subsection 32 (2) or (3),
no deduction shall be made under section 33 in respect of any outgoings and expenses incurred or which might be included as incurred in the production of that part of the gross income consisting of that amount.
