A French resident is a director and 50% shareholder of a UK company (A Co) (the other half is owned by a UK resident sibling). The company owns and rents out several commercial properties. The French resident director wishes to enter into a sub-letting arrangement. One of the properties in A Co is currently leased to another family owned UK trading company (B Co) of which the UK resident is a director and 20% shareholder, and the French resident is a 20% shareholder in B Co but not a director. Are there any foreseeable issues with rearranging the letting of this property to the French resident from A Co at an undervalue? The French resident then wishes to sub-let the property to B Co and make a personal profit. 

A non-UK resident who receives employment income in the UK is liable to UK tax on those earnings. If you look at www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21640 and subsequent pages, you can see that assets transferred to a director or employee at an undervalue create a tax charge on the director or employee. So, the French resident will be taxed on the undervalue, but presumably he will have a UK personal allowance available to him. Furthermore, if he receives UK rental income, by letting the property to B Co, he will be liable to UK tax on this income.