1. Directors who have use of an overseas property owned by a company whose sole activity is to hold that property.

2. The Government has today announced its intention to bring forward legislation in Finance Bill 2008 which will ensure that individuals who have bought or will buy a home abroad, will not face a benefit in kind tax charge for any private use of the property if purchased through a company.

3. Some UK resident individuals have set up or acquired companies to own a property abroad, generally for holiday use. Where they direct the company's affairs (whether through an agent or not) they can be within the scope of the living accommodation charge, although they may not have been aware of this or may have considered that no tax or NICs charge arose in these circumstances (and have not, therefore, reported the matter to HM Revenue & Customs (HMRC)).

4. This measure will remove that tax charge where certain qualifying conditions are satisfied.

5. The legislation will ensure that all those who come within its scope will not face the benefit in kind tax charge – however long they have owned the property through a company.

6. Chapter 5 of the Income Tax (Earnings and Pensions) Act 2003 sets out the tax position when accommodation is provided by an employer. Unless covered by a specific exemption a tax charge can arise where a property is provided by an employer to their employees, or to a director, when the property is available for their use.

7. The exemption will only apply to the benefit in kind charge. It will apply where an overseas property is owned by a company that is owned by individuals and whose sole activity is holding that property for occupation and/ or letting. It will have retrospective effect.