SE21660 - Benefits: assets transferred at overvalue by directors and employees to their employers

Employees are sometimes able to transfer assets to their employers for more than they are worth. This is particularly so where the employee is a director of a company in which he is one of the shareholders or the main one. You should normally contend that the excess over market value is chargeable as an emolument from the employment under Section 19 (1)1 ICTA 1988 ( SE08001). But if there is difficulty in establishing this, a director or employee within Part V Chapter II ICTA 1988 can be charged on the benefit under Section 154 (1). As the benefit is provided by the employer it is automatically deemed to have been provided “by reason of the employment” ( SE20502).

See the example at SE21661

For the information required by the District Valuer to establish “market value” see SE08002.