Commentary

E1.1127 Transfer of assets abroad—the escape clause

Personal and employment tax

E1.1127 Transfer of assets abroad—the escape clause

Transfer of assets abroad—exemptions

E1.1127 Transfer of assets abroad—the escape clause

The following escape clause applies where all the 'relevant transactions' are carried out on or after 5 December 2005. See below for where some or all of the relevant transactions were carried out before that date. A transaction is a relevant transaction if it is a relevant transfer (see E1.1103) or an associated operation (see E1.1104)1.

The escape clause is that an individual is not liable to income tax under the transfer of assets abroad rules for a tax year by reference to the relevant transactions if he satisfies an HMRC officer2:

  1.  

    (a)     that it would not be reasonable to conclude that the purpose of avoiding liability to taxation was the purpose (or one of the purposes), for which the relevant transactions (or any one or more of them) were effected, or

  2.  

    (b)     (in a case where condition (a) is not met) that all the relevant transactions were genuine commercial transactions (see below) and it would not be reasonable to conclude that any one or more of them was more than incidentally designed for the purpose of avoiding liability to taxation

In drawing the conclusions in (a) and (b), all the circumstances of the case must be taken into account. 'Taxation' is not limited to income tax but means any taxes, duties and national insurance contributions for which HMRC is responsible3. On appeal, the Tribunal has jurisdiction to affirm or replace any decision taken by an HMRC officer on this

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