Part 13

Tax avoidance
Chapter 2

Transfer of assets abroad

Charge where capital sums received

Individuals receiving capital sums as a result of relevant transactions
728
1
Income is treated as arising to such an individual as is referred to in section 727(1) or 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, ...
b
the capital receipt conditions are met in respect of the individual in the tax year (see section 729) , and
c
the individual is
UK
resident for the tax year
.
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 if—
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.
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—
a. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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.
S. 728(2A) inserted (with effect in accordance with Sch. 10 paras. 20, 21(1) of the amending Act) by Finance Act 2013 (c. 29), Sch. 10 para. 14(4)
S. 728(3)(a) omitted (with effect in accordance with Sch. 10 paras. 20, 21(2) of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 10 para. 14(5)
Pt. 13 Ch. 2 modified (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), Sch. 10 paras. 10(9), 11
S. 728(3)(b) substituted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 63(3)(b) (with Sch. 46 para. 73)
S. 728(1)(c) and word inserted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 63(2)(b) (with Sch. 46 para. 73)
S. 728(1A) substituted for s. 728(1A)(1B) (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), Sch. 12 paras. 34, 70(1)
Word in s. 728(1)(a)(iii) omitted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 46 para. 63(2)(a) (with Sch. 46 para. 73)
Words in s. 728(2) substituted (with effect in accordance with Sch. 10 para. 20 of the amending Act) by Finance Act 2013 (c. 29), Sch. 10 para. 14(3)
Pt. 13 Ch. 2 applied (with effect in accordance with art. 1(2)(3) Sch. 1 of the amending S.I.) by The Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001), regs. 1(1), 21
Pt. 13 Ch. 2 applied by 1988 c. 1, s. 762ZA (as inserted (21.7.2008 with effect in accordance with Sch. 7 para. 98 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 94)
Words in s. 728 inserted (with effect in accordance with s. 22(10) of the amending Act) by Finance (No. 2) Act 2024 (c. 12), s. 22(5)