Section 809CZC — Income Tax Act 2007: Tax charged on income transferred

Tax charged on income transferred 809CZC 1 This section applies if—

a under a loan or credit transaction a person transfers income arising from property, b the person is not, as a result of Chapter 5B (finance arrangements), chargeable to income tax on the income transferred, and c the person is within the charge to income tax.

2 In such a case—

a income tax is charged under this section, b the tax is charged on an amount equal to the full amount of the income transferred, c the tax is charged for the tax year in which the transfer takes place, and d the person who transfers the income is liable for the tax.

3 This section does not prejudice the liability of any other person to tax.

4 For the purposes of this section a person transfers income if the person surrenders, waives or forgoes it.

5 Subsection (6) applies for the purposes of this section if—

a credit is given for the purchase price of property, and b the rights attaching to the property are such that the buyer's rights to income from the property are suspended or restricted during the life of the debt.

6 The buyer must be treated as surrendering income of an amount equal to the income the buyer in effect forgoes by obtaining the credit.

7 For the purposes of this section an amount of income payable subject to deduction of income tax must be taken as the amount before deduction of tax.