TURIN, Italy (Reuters) - England soccer coach Fabio Capello is being investigated for tax fraud by prosecutors in the northern Italian city of Turin, a legal source said yesterday.

The source said the investigation had been going on for around a year and involved whether Capello should have been paying Italian taxes on money, earned from sponsors, which the coach was holding in Luxembourg.

Investigators have been looking at documents from the time Capello was coach of AS Roma between 1999 and 2004 and Juventus between 2004 and 2006.

Capello, who officially started as England coach last week, said in a statement on the FA website that his finances are in order and he was not aware of any matters which would be of concern.

"With my advisors, I have always endeavoured to conduct my financial business with integrity.

"I have assured The FA today that my finances are in order and that I am not aware of any matters which would be of concern. I understand that these inquiries in Italy are part of a wider investigation into the finances of many high-profile individuals."

Capello's lawyer Alberto Moro Visconti told reporters in Turin: "The transactions that have been reported are not attempts at tax evasion, but are absolutely lawful commercial transactions, made in the public domain. When the moment is right we will explain it to the magistrate."

An FA spokesman added: "It is our understanding that the Italian tax authorities are currently following a procedure of looking into the finances of numerous high profile individuals, particularly in sport.

"We have spoken to Fabio and his advisors about today's newspaper report in Italy and they have explained the facts. They have also given us their assurance that Fabio's tax payments are in order."

Several top Italian sports personalities have been investigated by tax authorities including former MotoGP world champion Valentino Rossi, who was probed because he was based in Britain while also spending a significant amount of time in Italy.

Capello was appointed England coach in December having won domestic titles with all four of the clubs he managed — AC Milan, Real Madrid, AS Roma and Juventus.

The 61-year-old's last job was as boss of Real Madrid for a second time, where he was sacked last June despite helping the club to the championship.

As well as living in Spain for a time, he has a home north of Milan and also owns a house in Switzerland.

"It is a tax inspection sparked by controls on the balance sheet of Juventus, a part (of the probe that dates back) from some time ago and is known to everyone," Capello's son and agent Pierfilippo told Gazzetta dello Sport's Web site.

"It follows the modus operandi adopted up to now to check the earnings of famous people. One of the reasons for this method is that these people, like my father, often change residence because of work."

He also told Sky Sports News: "My father is innocent and we are really confident we will be able to demonstrate this simply and quickly."