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HMRC internal manual

Savings and Investment Manual

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HM Revenue & Customs
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Transfers of income streams: non-corporate transferors

Transfers of income streams: non-corporate transferors

The legislation dealing with non-corporate transferors is in Chapter 5A of ITA 2007. The provisions match those for companies and differ only to the extent necessary to cater for the different structure of income tax.

There are different rules for non-corporate transferors to determine the period in which income is treated as arising. These timing provisions reflect the fact that whereas a company will always produce accounts, a person within the charge to income tax is likely to do so only in relation to the taxation of profits from a trade or property business.

ITA07/S809AZB(3) sets out the default timing rule, which is that the income is to be treated as arising in the chargeable period of the transferor in which the transfer takes place. This differs from the corporation tax provision where the default rule is that the income is to be allocated in accordance with GAAP. The default rule applies where, apart from the transfer, the relevant receipts would not have been brought into account in calculating profits from a trade or property business.

See CFM77150 for the rules for cases where the relevant receipts would have been brought into account as trading income or income from a property business.