Depending on the nature and length of a relocation or assignment there are a variety of tax-free expenses/allowances that may be provided to employees.
In general, the expenses which can be reimbursed without giving rise to a charge to tax are those incurred directly as a result of the change of residence. The following is a non-exhaustive list of allowable relocation expenses:
- auctioneer’s and solicitor’s fees and stamp duty arising from moving
- removal of furniture and effects
- storage charges
- insurance of furniture and effects in transit or in storage
- cleaning stored furniture
- travelling expenses on removal
- temporary subsistence allowance while looking for accommodation at the
new location (subject to a maximum of 10 nights at the appropriate
subsistence rate as per Revenue Guidelines).
- the vouched rent of temporary accommodation for a period not
exceeding three months (this may not be paid concurrently with the
temporary subsistence referred to above).
Reviewing an employment package before an employee relocates or is assigned abroad ensures it can be structured tax efficiently to take advantage of all available reliefs and exemptions.
Consideration should also be given to eligibility for the Special Assignee Relief Program and any other available tax reliefs.
We have considerable experience advising multi-nationals on how to structure relocation packages for international assignees to ensure the most tax efficient package is provided.