CFM77020 | Other tax rules on corporate debt: transfers of income streams: the legislation

Transfers of income streams: the legislation and guidance

The legislation dealing with the treatment of the transferor and transferee of income streams can be found at:

CTA10/PT16/CH1 for company transferors

ITA07/PT13/CH5A for individual transferors

CTA09/PT6/CH2B onwards for company transferees.

This new legislation replaces a number of earlier provisions, which were introduced to target particular schemes involving particular types of income. The following provisions are now repealed:

• ICTA88/S730 (transfers of rights to receive distributions in respect of shares)

• ICTA88/S775A (transfers of rights to receive annual payments)

• ICTA88/S785A (rent factoring of leases of plant or machinery).The guidance on the treatment of corporate transferors and transferees, and non-corporate trader transferors is in this section of the CFM. The treatment of individual transferors who transfer the right to income in a personal capacity (as opposed to as traders) is dealt with in the Savings and Investment Manual (SAIM11000+).

  For transfers of assets or income streams through partnerships, new rules came into effect for income tax where a transfer of the right to relevant receipts occurs on or after 6 April 2014 and for corporation tax where a transfer of the right to relevant receipts occurs on or after 1 April 2014.

  The disposal of income streams through partnerships legislation can be found at ITA07/PT13/CH5AA and CTA10/PT16/CH1A

  The disposal of assets through partnerships legislation can be found at ITA07/PT13/CH5D and CTA10/PT16/CH4.

Guidance can be found at CFM77100 {#}.