INTM602380 - Transfer of assets abroad: Other general provisions: No duplication of charges - income to be taken into account once

ITA07/S743(1) provides that no amount of income may be taken into account more than once in charging income tax under the transfer of assets provisions.

For example, if income has been taken into account in determining an amount chargeable under the benefits charge, and subsequently there is a further provision of a benefit from the same transactions to another individual that would also potentially lead to a charge, the income already taken into account could not be taken into account again. Similarly, if income is taken into account for the purposes of the income charge, and there is a provision of a benefit to another individual, the income could not be taken into account again.

Income that arises to a person abroad may be distributed to another person who is also a person abroad – for example, a group company may make a distribution to its parent company. HMRC generally accept that in such situations the legislation should not be construed to effectively duplicate the amount of income that may be taken into account for the transfer of assets provisions. In such situations it will be appropriate to consider to what extent the distribution and the underlying income from which it is paid are the same income. A similar situation may occur if a non-resident company makes a distribution to a non-resident trust. Again, HMRC will generally accept that legislation should not be construed to effectively duplicate the amount of income to be taken into account for the purposes of the legislation.

Specific cases of difficulty concerning the amount of income to be taken into account should be referred to Personal Tax International, Liverpool in accordance with the instructions at INTM604440.