INTM601740 - Transfer of assets abroad: The benefits charge: The six steps

To find the amount, if any, of the income treated as arising for the purpose of the benefits charge for any tax year in respect of benefits provided to which the provisions apply, the following 바카라 사이트˜Steps바카라 사이트™ are taken, as set out in ITA07/S733.

Step 1 바카라 사이트“ 바카라 사이트˜the total benefits바카라 사이트™

Identify the amount or value of such benefits received by the individual in the tax year and in any earlier tax year in which benefits charge could or has applied. The benefits of an earlier year to be taken into account are those of a tax year in which there has previously been a benefits charge, or in which there would have been a benefits charge but for an insufficiency of relevant income to match against benefits received. The result is 바카라 사이트˜the total benefits바카라 사이트™.

Step 2 바카라 사이트“ 바카라 사이트˜the total untaxed benefits바카라 사이트™

Deduct from the total benefits the total amount of income treated as arising to the individual under the benefits charge in any earlier tax years as a result of the relevant transfer or associated operations. The result is 바카라 사이트˜the total untaxed benefits바카라 사이트™.

Step 3 바카라 사이트“ 바카라 사이트˜the relevant income of the tax year바카라 사이트™

Identify the amount of any income which arises in the tax year to a person abroad and, as a result of the relevant transfer or associated operations, can be used directly or indirectly for providing a benefit for the individual. That amount is 바카라 사이트˜the relevant income of the tax year바카라 사이트™ in relation to the individual and the tax year.

Step 4 바카라 사이트“ 바카라 사이트˜total relevant income바카라 사이트™

Add together the relevant income of the tax year and the relevant income of earlier tax years, (determined on the same basis as for Step 3) in relation to the individual. The result is the 바카라 사이트˜total relevant income바카라 사이트™.

Step 5 바카라 사이트“ 바카라 사이트˜the available relevant income바카라 사이트™

From the total relevant income, deduct:

  • the amount deducted at Step 2 (the total amount of income treated as arising to the individual under the benefits charge in any earlier tax years), and
  • any other amount which may not be taken into account because of the no duplication of charges provisions (INTM602360).

The result is 바카라 사이트˜the available relevant income바카라 사이트™.

Step 6 바카라 사이트“ 바카라 사이트˜income treated as arising바카라 사이트™

Compare the total untaxed benefits (Step 2) and the available relevant income (Step 5).

The amount of income treated as arising for the purpose of the benefits charge for any tax year is the lower of

  • the total untaxed benefits, or
  • the available relevant income.

The above steps are subject to two specific points:

There is a reduction in the amount charged where there has been a previous capital gains tax charge as a result of the receipt of the benefits: see INTM601520 second paragraph. Where any element of a benefit has resulted in chargeable gains accruing to the individual, that amount should be deducted from 바카라 사이트˜the total untaxed benefits바카라 사이트™ in Step 2 in any subsequent application of the Steps formula.

Modifications are required where there have been relevant transactions both before 5 December 2005 and after 4 December 2005, and exemptions under these provisions (INTM602840) cease to apply: see INTM601760.