Income Tax Act 2007 section 809AZA

Application of Chapter

Section 809AZA introduces the rules on transfers of income streams, setting out when these anti-avoidance provisions apply to a person who transfers a right to receive income to someone else without also transferring the underlying asset that generates that income.

• The rules apply where a person within the charge to income tax (the transferor) transfers to another person (the transferee) a right to receive income, without transferring the underlying asset from which that income arises
• The income in question — called "relevant receipts" — is income that would otherwise be taxed as the transferor's income or would be included in calculating the transferor's taxable profits
• The rules still apply where all rights under an annual payments agreement are transferred, and a transfer under a sale and repurchase arrangement is not treated as a genuine transfer of the underlying asset
• Certain exclusions exist for amounts already taxed, certain annuities, and transfers made by way of security, with separate provisions covering partnership share transfers