Section 681DD — Income Tax Act 2007: Charge to income tax

Charge to income tax 681DD 1 The person obtaining the capital sum is charged to income tax, for the tax year in which the sum is obtained, on the amount given by subsection (2).

2 That amount is—

a the amount of the payment for which a deduction by way of relevant tax relief is allowed, or b the total amount of such payments (if more than one).

3 But subsections (1) and (2) have effect subject to—

a subsections (4) to (7),

and b section 681DE(3) (hire-purchase agreements).

4 The amount on which tax is charged under this section is not to exceed the capital sum obtained (but see section 681DE(4)).

5 Subsection (6) applies if—

a income tax is charged under this section in respect of a capital sum, and b a payment or part of a payment is taken into account in deciding the amount on which the tax is charged.

6 The payment or part must be left out of account in deciding—

a whether income tax is to be charged under this section in respect of another capital sum, and b the amount on which the tax is to be charged (if any is to be charged).

7 The order in which subsections (5) and (6) are applied is the order in which capital sums are obtained.

8 An amount on which income tax is charged under this section is treated for income tax purposes as an amount of income.