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|
Note that unless there are special factors that indicate that the overvalue is not earnings from the employment, the charge on the benefit is under section 62 ITEPA 2003 (see EIM21660 and EIM08001), rather than section 203 ITEPA 2003.