EIM08004 - Employment income: transfer of real property to employees: property outside the UK
The same principles apply as for United Kingdom property
(see
EIM08001 onwards) although establishing
the market value may not be easy.
Essentially the onus is on the taxpayer to show that the
transfer price is an arm's length one, that is, the price that the
purchaser could obtain for the property if he or she disposed of it
as soon as he or she received it.
Where a valuation of residential property is required,
valuation advice can be provided by Shares Valuation (Foreign).
Valuation advice on commercial property is given by the Revenue
Section, Chief Executive’s Office, Valuation Office Agency.
Before the submission is made, the employee or agent should
have been asked to provide a valuation at the relevant date,
prepared by a professionally qualified valuer. When such a
valuation has been obtained, or if the taxpayer is unable or
unwilling to provide such a valuation, the case should be submitted
to SV (Foreign) (residential property) or the Revenue Section,
Chief Executive’s Office, Valuation Office Agency (commercial
property) along with a memo setting out the following:
- a statement that the valuation is required for the purposes of
a charge to tax on employment income
- the address and a full description of the property including
the area of land owned
- the dates of the vendor's acquisition and disposal of the
property
- the consideration for the disposal
- the precise interest in the property that was transferred, for
example whether it was a freehold or leasehold interest. If the
interest transferred was a lease, a copy of the lease should be
provided
- details of any tenancy to which the property was subject at the
valuation date, including its duration, the tenant's name and the
rent payable
- the valuation put forward by the employee along with a copy of any professional valuer's report that has been obtained.
Any other relevant information or documents that are provided by
the employee should accompany the valuation request.
Remember that the transaction may have tax implications for
the other party and liaise with that party's Inspector before
settling the case.
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
