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HMRC internal manual

Employment Income Manual

Removal or transfer costs: sale of property to employer

Part 4 Chapter 7 ITEPA 2003

If the employee sells the old home to the employer for no more than its open marketvalue, then:

  • if the employer meets the employee’s selling costs (or provides benefits such as legal services, etc) the expenses and benefits will be taxable but eligible for exemption
  • an employee or director is not liable for tax in respect of costs incurred by the employer in buying, maintaining or selling the property because of Section 326 ITEPA 2003 (see EIM21662)
  • since any benefit arising to the employee ends with the transfer of the property there is no tax charge if the employer subsequently sells the property at a loss.

If the employee sells to the employer for more than market value see EIM08008.