Income Tax (Trading and Other Income) Act 2005 section 727

Certain annual payments by individuals

Section 727 provides an exemption from income tax for certain annual payments made by individuals, so that the recipient does not have to pay tax on them.

• Annual payments made by an individual that arise in the United Kingdom are generally exempt from income tax in the hands of the recipient.
• The exemption does not apply to commercial payments or payments made for non-taxable consideration, which remain taxable.
• Where an individual has died, the exemption extends to payments made by the individual's personal representatives, provided the exemption would have applied had the individual made the payment themselves.
• For the purposes of this exemption, "individual" includes a Scottish partnership where at least one of the partners is an individual.