Income Tax Act 2007 section 809AAZB

Relevant amount to be treated as income

Section 809AAZB sets out how the relevant amount arising from a disposal of an income stream is treated as taxable income of the transferor, including the timing of the charge and how it interacts with other anti-avoidance provisions.

• The relevant amount is taxed as income of the transferor in the same way the underlying receipts would have been taxed had the disposal not taken place
• The relevant amount is generally the consideration received for the income stream, but if the consideration is significantly below market value, a deemed market value is used instead
• The timing of when the income is treated as arising follows the rules in section 809AZB(3) to (6), with references to "transfer" read as "disposal"
• Where both Chapter 5AA and Chapter 5D (disposals of assets through partnerships) could apply to the same disposal, Chapter 5AA does not apply if Chapter 5D would produce a higher income tax charge