Income Tax Act 2007 section 733C

Cases where income treated as arising to recipient of onward gift

Section 733C determines when and how the recipient of an onward gift (a payment passed on from the original beneficiary of a transfer of assets abroad) is treated as having taxable income, depending on their UK residence status and whether they use the remittance basis.

• Where the subsequent recipient is UK resident and does not use the remittance basis, the full amount of the onward payment (to the extent it falls within the matching rules) is treated as their taxable income under the transfer of assets abroad provisions.
• Where the subsequent recipient is UK resident but does use the remittance basis, only the portion of the onward payment actually remitted to the UK in the tax year is treated as their taxable income.
• The taxable amount is reduced by any part already subject to income tax under other provisions, so that the same income is not taxed twice.
• If, after that reduction, the resulting amount exceeds the originally matched income (the amount identified under section 733B(1)(a)), the excess is also deducted, capping the charge at the underlying matched income figure.