INTM602440 | Transfer of assets abroad: Other general provisions: No duplication of charges - subsequent receipt of income

Until 5 April 2013, ITA07/S743(4) dealt with situations where income had been charged to tax under the income charge and the income was then subsequently received by the individual. This subsection stated that the income could not be treated as being the individual’s income again for income tax purposes when it was received.

In the Finance Act of 2013, ITA07/S743(4) was repealed and ITA07/S743(2A) and (2B) replaced it with effect from 6 April 2013. The new subsections also state that the income could not be deemed to be treated as being the individual’s income again for income tax purposes when it was received, if it had been charged to tax under the income charge.

Issues can arise when an individual has been taxed under ITA07/S720 or S727 in relation to the income of a non-resident trust or company, and the entity concerned makes a subsequent distribution of income to the individual. HMRC accept that generally the reference to income in ITA07/S743(4), S743(2A) and S743(2B) can be construed to cover such situations. However, where distributions are paid out of accumulated income, it will be appropriate to consider to what extent the accumulated income has been charged to tax on the individual under the income charge in the preceding years.

If issues regarding double charging on the subsequent receipt of income arise within specific cases, you should refer the case to Personal Tax International, Liverpool in accordance with the instructions at INTM604440.