Income Tax Act 2007 section 721

Individuals with power to enjoy income as a result of relevant transactions

Section 721 sets out the conditions under which a UK-resident individual who has the power to enjoy income of a person abroad — arising from a relevant transfer or associated operations — is treated as having that income for income tax purposes.

• Three conditions (A to C) must all be met: the individual has power to enjoy a foreign person's income through a relevant transfer or associated operations; that income would be taxable if it were the individual's own UK income; and the individual is UK resident for the tax year.
• The amount treated as arising equals the full amount of the foreign person's income, subject to possible adjustments under sections 724 and 725.
• The charge does not apply if the individual is already liable to income tax on the same foreign income under a different provision and has paid that tax in full.
• It does not matter whether the foreign income can be enjoyed immediately or only later, whether the individual was UK resident when the original transfer was made, or whether the transfer was intended to avoid income tax.