Income Tax (Trading and Other Income) Act 2005 section 728

Commercial payments

Section 728 removes the exemption from income tax that section 727 provides for certain annual payments made by individuals, where those payments are made for commercial reasons connected with the individual's trade, profession or vocation.

• Section 727 generally exempts certain annual payments made by individuals from income tax in the hands of the recipient
• Section 728 creates an exception: if the payment is made for commercial reasons, the exemption does not apply
• The commercial reasons must be connected with the individual's trade, profession or vocation
• Where this exception applies, the recipient of the annual payment remains liable to income tax on the amount received