Income Tax Act 2007 section 809O

Section 809L: dealings where there is a connected operation

Section 809O sets out the rules for determining whether an individual's foreign income or chargeable gains are treated as remitted to the UK where a "connected operation" is involved — essentially an indirect or facilitated route by which overseas funds find their way into the UK through dealings with a relevant person's property.

• A "connected operation" is any arrangement carried out either with reference to, or with a view to enabling or facilitating, a qualifying disposition — broadly, a transfer of money or property derived from the individual's foreign income or gains, made by a relevant person to or for the benefit of the person whose property is dealt with in the UK.
• Whether someone counts as a "relevant person" for these purposes is judged at the time the property is actually dealt with, not at any earlier or later point.
• A disposition does not count as a qualifying disposition if it represents full consideration in money or money's worth for the dealing in question — in other words, genuine arm's length transactions are excluded.
• Enjoyment of property, benefits or services by a relevant person can be disregarded in certain circumstances: where the enjoyment is virtually to the entire exclusion of all relevant persons; where the benefit enjoyed by relevant persons is no more than negligible; where full consideration is paid for the enjoyment; or where the property, benefit or service is available to the general public on the same terms.