Question:
Can you advise on the process for a UK company buying an Italian property? The complication is that the Italian property is currently privately owned by the directors of the UK company. The company would rent the property out commercially once bought.
Arthur Weller Replies:
The process for the UK company buying the Italian property from the directors of the company is the same as anyone else buying the property from the directors, except that the company must make sure not to overpay for the property and only pay the market value.
If the company does overpay then most likely HMRC will contend that the excess over market value is chargeable as earnings by virtue of his employment on the director. See page EIM21660 in the Employment Income Manual on HMRC website:
