INTM602620 | Transfer of assets abroad: Exemptions from charge: Introduction

When the transfer of assets provisions were first introduced in 1936 as part of a package of measures to combat avoidance of tax, it was recognised that they also had the potential to capture straightforward commercial transactions carried out in the ordinary course of business not involving tax avoidance. An exempting provision was therefore included with the legislation.

This exemption has been modified and added to over the years and the exemptions are now contained in ITA07/S736 – S742. This chapter looks at the nature and conditions of those exemptions.

Before the tax law was rewritten into ITA 2007, the provision now written as the avoidance purpose exemption operated so as not to apply the income or benefits charge where certain specified conditions were met. In effect the avoidance purpose exemption and charge non-application are both the same.

They operate in such a way that an individual, who would otherwise be chargeable to tax under either the income or benefits charge, is not so charged where they demonstrate that the specific conditions are met in relation to the transactions that would otherwise result in the charge.

Finance Act 2013 introduced a further exemption that could be found at ITA07/S742A. For the purpose of this guidance this is referred to as the genuine transactions exemption. This further exemption was repealed with effect from 6 April 2025 following the UK’s withdrawal from the European Union.

Where an individual seeks exemption, this must not be dealt with by Network offices, but should be submitted to the WMBC Assets, Incentives and Reliefs (AIR) team in accordance with the instructions at INTM604400.