SE21661 - Benefits: assets transferred at overvalue by directors and employees to their employers: example
A company pays one of its directors £12,000 for a piece of land whose market value is only £5,000. The chargeable benefit is
|
| £ |
| Expense incurred by the company | 12,000 |
| Made good by the
director (the value
of the land) | 5,000 |
| Chargeable benefit | 7,000 |
Note that unless there are special factors that indicate that
the overvalue is not an emolument from the employment, the charge
on the benefit is under Section 19(1)1 ICTA 1988 (
SE21660 and
SE08001), rather than Section 154 ICTA
1988.
