Part 13Tax avoidance
C2C1Chapter 2Transfer of assets abroad
Pt. 13 Ch. 2 applied (with effect in accordance with art. 1(2)(3) Sch. 1 of the amending S.I.) by The Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001), regs. 1(1), 21
Charge where benefit received
733EF1Cases where settlor liable following onward gift
1
Subsection (3) applies if—
a
this section applies (see section 733B(1)),
b
the subsequent recipient is a close member of the settlor's family when the onward payment is made,
c
the subsequent recipient is UK resident for the charging year,
d
section 809B, 809D or 809E applies to the subsequent recipient for the charging year,
e
none, or part only, of the onward payment is remitted to the United Kingdom in the charging year,
f
there is a time in the charging year when the settlor is UK resident,
g
there is no time in the charging year when the settlor is domiciled in the United Kingdom, and
h
there is no time in the charging year when the settlor is regarded for the purposes of section 718(1)(b) as domiciled in the United Kingdom as a result of section 835BA having effect because of Condition A in that section being met.
2
Subsection (3) also applies if—
a
this section applies (see section 733B(1)),
b
the subsequent recipient is a close member of the settlor's family when the onward payment is made,
c
the subsequent recipient is non-UK resident for the charging year,
d
there is a time in the charging year when the settlor is UK resident,
e
there is no time in the charging year when the settlor is domiciled in the United Kingdom, and
f
there is no time in the charging year when the settlor is regarded for the purposes of section 718(1)(b) as domiciled in the United Kingdom as a result of section 835BA having effect because of Condition A in that section being met.
3
Section 731 applies—
a
as if the settlor were an individual to whom income is treated as arising under section 732 for the charging year, and
b
as if, subject to subsection (4), the amount of that income—
i
were equal to the amount or value of so much of the onward payment as is within any of sub-paragraphs (i) to (iii) of section 733B(1)(e), or
ii
were, where this subsection applies because of subsection (1) in a case where part only of that much of the onward payment is remitted to the United Kingdom in the charging year, equal to the amount or value of the remainder of that much of the onward payment.
4
The amount given by subsection (3)(b) (before adjustment under this subsection) is to be adjusted as follows—
a
deduct any part of the amount on which the settlor is liable to income tax otherwise than under this section, and
b
if following any adjustment under paragraph (a) the amount exceeds the amount mentioned in section 733B(1)(a), deduct the excess.
5
Where any tax for which the settlor is liable as a result of subsections (3) and (4) is paid, the settlor is entitled to recover the amount of the tax from the subsequent recipient.
6
For the purpose of recovering that amount, the settlor is entitled to require an officer of Revenue and Customs to give the settlor a certificate specifying—
a
the amount of the income concerned, and
b
the amount of tax paid,
and any such certificate is conclusive evidence of the facts stated in it.
7
In this section—
a
“the settlor” means the settlor of the settlement, mentioned in section 721A(3) or (4) or 729A(3) or (4), which because of section 733B(1)(b)(i) is the settlement concerned, and
b
“close member”, in relation to the family of the settlor, is to be read in accordance with section 733A(7) and (8).
Pt. 13 Ch. 2 applied by 1988 c. 1, s. 762ZA (as inserted (21.7.2008 with effect in accordance with Sch. 7 para. 98 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 94)