Taxes Consolidation Act 1997 section 365

Provisions supplementary to sections 360 to 364

Section 365 sets out the supplementary rules that underpin the islands residential accommodation reliefs in sections 361 to 364, including anti-avoidance protections, building standards, timing rules for expenditure and appeal rights.

• Leases must not give the tenant an option to buy the property at below market value, and houses let to connected persons only qualify if the lease terms are arm's length.
• Houses must meet construction and improvement standards set by the Minister for the Environment and Local Government, and be open to inspection by authorised officers.
• Only expenditure properly attributable to work actually carried out during the qualifying period counts, and state-funded expenditure is excluded.
• Deductions are treated as capital allowances and clawed-back rent as a balancing charge for CGT purposes, with appeals going to the Appeal Commissioners.