Income Tax (Trading and Other Income) Act 2005 section 643J

Cases where income treated as arising to recipient of onward gift

Section 643J determines when an onward gift received by a UK-resident individual is treated as their taxable income, depending on whether or not they use the remittance basis of taxation.

• Where the recipient of an onward gift is UK-resident and does not use the remittance basis, the full value of the onward payment is treated as their income for the tax year in which the gift is made
• Where the recipient is UK-resident but does use the remittance basis, only the amount of the onward payment that is actually remitted to the UK in a given tax year is treated as their income for that year
• The amount treated as income may be reduced by any part on which the recipient is already liable to income tax under other provisions, to avoid double taxation
• If, after that reduction, the remaining amount exceeds a specified cap (determined under the related provisions), the excess is also deducted from the amount treated as income

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