Part 13

Tax avoidance
Chapter 4

Sales of occupation income

Charge on sale of occupation income

Conditions for sections 778 and 779 to apply
777
1
Sections 778 and 779 apply only if conditions A to C are met in respect of an individual.
2
Condition A is that the individual carries on an occupation wholly or partly in the United Kingdom.
3
Condition B is that transactions are effected or arrangements made to exploit the individual's earning capacity in the occupation by putting another person (see section 782) in a position to enjoy—
a
all or part of the income or receipts derived from the individual's activities in the occupation, or
b
anything derived directly or indirectly from such income or receipts.
4
The reference in subsection (3) to income or receipts derived from the individual's activities includes a reference to payments for any description of copyright or licence or franchise or other right deriving its value from the individual's activities (including past activities).
5
Condition C is that as part of, or in connection with, or in consequence of, the transactions or arrangements a capital amount is obtained by the individual for the individual or another person.
6
For the purposes of subsection (5), the cases where an individual (“A”) obtains a capital amount for another person (“B”) include cases where A has put B in a position to receive the capital amount by providing B with something of value derived, directly or indirectly, from A's activities in the occupation.
7
In this Chapter “capital amount” means an amount in money or money's worth which does not fall to be included in a calculation of income for purposes of the Tax Acts otherwise than as a result of this Chapter.
Words in s. 777(7) substituted (retrospective with effect in accordance with art. 1(2) of the amending S.I.) by The Income Tax Act 2007 (Amendment) (No. 2) Order 2009 (S.I. 2009/2859), art. 4(5)