Part 13Tax avoidance

Chapter 2Transfer of assets abroad

Charge where capital sums received

728Individuals receiving capital sums as a result of relevant transactions

(1)

Income is treated as arising to such an individual as is referred to in section 727(1) F1or 727A(1) in a tax year for income tax purposes if—

(a)

income has become the income of a person abroad as a result of—

(i)

a relevant transfer,

(ii)

one or more associated operations, or

(iii)

a relevant transfer and one or more associated operations, F2...

(b)

the capital receipt conditions are met in respect of the individual in the tax year (see section 729) F3, and

(c)

the individual is UK resident for the tax year.

F4(1A)

The amount of the income treated as arising under subsection (1) is equal to the amount of the income of the person abroad (subject to subsection (2)).

(2)

Section 725 (reduction in amount charged where controlled foreign company involved) applies for determining the amount of income treated as arising under subsection (1) as F5if—

(a)

in subsection (1) of that section—

(i)

the reference to section 721 were a reference to this section, and

(ii)

the reference to section 721(2) were a reference to subsection (1)(a) of this section, and

(b)

subsections (2A) and (2B) of that section were omitted.

F6(2A)

Subsection (1) does not apply if—

(a)

the individual is liable for income tax charged on the income of the person abroad by virtue of a charge not contained in this Chapter, and

(b)

all that income tax has been paid.

(3)

It does not matter for the purposes of this section—

F7(a)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F8(b)

whether the individual is UK resident for the tax year in which the relevant transfer abroad is made (if different from the tax year mentioned in subsection (1)), or

(c)

whether the avoiding of liability to income tax is a purpose for which that transfer is effected.