Client owns 10% of property development company with other 90% owned by father. Company owns 60% of house that client lives in with client owning other 40%. All legislation refers to benefits "by reason of employment" but client is only a shareholder in company not director or employee and carries out no work for company. My gut reaction is that there is still a benefit in kind (on the 60%), which would be quite substantial since property is worth approx. £500K. Am I right or is there no benefit because he is not an employee and therefore by reason of employment cannot apply?
Roger Harding
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Director's benefit on accommodation
The client might be taxable as a shadow director: see ITEPA 2003 s67(1).
Possibly the father of the client could be taxable: see ITEPA 2003 ss 97(1)(b) and s721(4).
The following link is to a summary that gives comments about the quantum of any benefit-
http://www.chiene.co.uk/pdf/provlivaccom.pdf