Income Tax Act 2007 section 734

Reduction in amount charged: previous capital gains tax charge

Section 734 prevents the same economic benefit from being taxed twice — once under income tax (through the transfer of assets abroad rules) and again under capital gains tax — by reducing the income tax charge where a capital gains tax charge has already arisen on the same benefits.

• Where benefits received under the transfer of assets abroad rules also give rise to chargeable gains attributed to a person under the settlement or trust provisions of TCGA 1992, a double tax charge could otherwise arise
• For any tax year following one in which such chargeable gains have been attributed, the income treated as arising under section 732(2) is recalculated by reducing the total untaxed benefits by the amount of those chargeable gains
• The recalculation uses the framework in section 733(1), and the term "total untaxed benefits" carries the same meaning as defined at Step 2 of that section
• References to chargeable gains in this section also include offshore income gains treated as arising to the individual under regulations 20 and 22 to 24 of the Offshore Funds (Tax) Regulations 2009