Transfer of assets abroad—transferors receiving capital sums
Transfer of assets abroad—transferors receiving capital sums

The following Private Client guidance note provides comprehensive and up to date legal information covering:

  • Transfer of assets abroad—transferors receiving capital sums
  • Charge where capital sums received
  • Non-domiciled transferors
  • Motive defence
  • EU defence
  • Calculating the charge
  • HMRC's power to obtain information

This Practice Note considers the charging provision under section 727 of the Income Tax Act (ITA 2007) applicable to transferors of assets abroad who receive capital sums as a result of the transfer. For information on the charge applicable to transferors with the power to receive income, see Practice Note: Transfer of assets abroad—transferors having the power to enjoy income.

See the Transfer of assets abroad—introduction Practice Note for a general introduction on the Transfer of Assets Abroad Code (the TAA Code).

Charge where capital sums received

For the 'capital sum' provisions to apply, there must have been a 'relevant transfer' by a person (the 'transferor'), with the effect that income has become payable to a person outside the UK.

If, in the relevant tax year or a previous tax year, the transferor was in receipt of:

  1. any loan to an individual or repayment of that individual's loan; and

  2. any other amount that:

    1. is not income, or

    2. is a gift, or

    3. a distribution where the recipient does not pay market value (in money or money's worth)

the transferor is charged to income tax on the capital sum received in that tax year.

The effect is that the income of the 'person abroad' is attributed to the transferor in each tax year in which he/she is resident in the UK (before 6 April 2013 the