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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Removal or transfer costs: relocation companies: guaranteed sale price schemes: relocation company buys property: example

Part 4 Chapter 7 ITEPA 2003


The employee joins the guaranteed sale price scheme on 1 September 2003.

The relocation company enters a binding contract to buy the property at open market value.

The employee vacates the property on 1 October 2003 and the guaranteed sale price of £120,000 is paid over.

The relocation company holds the property at its own financial risk: the employer does not have to contribute to the relocation company’s finance costs, nor make up any loss suffered when the property is sold on.

The property is sold to a third party on 1 January 2004 for £110,000.


The employee has been provided with the benefit of the opportunity to sell his or her property. The cost to the employer of providing the benefit includes the appropriate part of any management fee paid to the relocation company. But by virtue of Section 326 ITEPA 2003 (see EIM03127 and EIM21662) this is not taxed because the relocation company’s costs of buying and selling the property are covered by the concession.

The loss it realises when it sells the property does not produce a tax charge on the employee because the benefit to the employee has ceased with the transfer of the property to the relocation company.

If the employer funds the employee’s legal and other costs in selling the property they will be exempt if the conditions in EIM03104 onwards are satisfied