SE03109 - Removal or transfer costs: eligible expenses and benefits - disposal of old residence

Paragraphs 8 and 17, Schedule 11A ICTA 1988

Disposal covers both the sale of a property and the giving up of a tenancy or other interest in a property. The meaning of "other interest" in this context is quite wide. It can cover the situation where the employee lives in a house owned wholly by a spouse or partner but where the employee has contributed over the years to the mortgage, repairs and other household costs, so that an equitable interest in the property has been built up. Employment Income Technical can advise in cases of doubt or difficulty.

The property must be owned by, or the tenancy or other interest held by

• the employee, or
• the employee and one or more members of his/her family or household ( SE20504), or
• one or more members of the employee's family or household.

Disposal also includes intended disposal. If a sale falls through the expenses will still be eligible expenses provided that the employee does eventually succeed in selling or changes his/her residence in some other way - for example, by moving into permanent rented accommodation.

The specific expenses and benefits covered are:

• legal fees or services connected with the disposal.
• Legal fees or services connected with the redemption of a loan relating to the property. A loan relates to a property if it was raised to acquire the property, for example a mortgage, or if it was secured on the property, for example a home improvement loan.
• Penalties for redeeming a loan relating to the property
• Estate agent's or auctioneer's fees or services
• advertising
• disconnection of electricity, gas, water or telephone
• if the property is left empty awaiting disposal -

Note: the Council Tax for the period is not allowable.