Income Tax Act 2007 section 735A

Section 735: relevant income and benefits relating to foreign deemed income

Section 735A sets out the detailed ordering and matching rules for connecting benefits received by a non-UK domiciled individual with the underlying deemed income arising under the transfer of assets abroad provisions, where the remittance basis applies.

• Benefits received by the individual are listed chronologically, reduced by any amounts already matched to chargeable gains, offshore income gains, or settlements income charges
• Relevant income is ordered by tax year, with non-foreign income placed before foreign income within each year, and any income already subject to a charge under the duplication rules is removed
• The deemed income treated as arising under section 732(2) is then matched against both the ordered benefits and the ordered relevant income, earliest first
• The duplication exclusion does not apply where the income has already triggered an actual income tax charge under section 731, ensuring that income remains available for matching

---