Section 554Z11B — Income Tax (Earnings and Pensions) Act 2003: Earlier income tax liability: application of section 554Z11C

Earlier income tax liability: application of section 554Z11C 554Z11B 1 Section 554Z11C applies if the conditions in subsections (2) and (3) are met.

2 The first condition is that there is overlap between—

a the sum of money or asset (“sum or asset P”) which is the subject of the relevant step, and b a sum of money or asset (“sum or asset Q”) by reference to which, on an occasion that occurred before the relevant step is taken, A became subject to a liability for income tax (“the earlier tax liability”).

3 The second condition is that at the time the relevant step is taken—

a an amount is payable by a person (the “liable person”) in respect of the earlier tax liability, but the whole or part of that amount is unpaid and not otherwise accounted for, and b the liable person has not agreed any terms with an officer of Revenue and Customs for the discharge of the earlier tax liability.

4 For the purposes of this section there is overlap between sum or asset P and sum or asset Q so far as it is just and reasonable to conclude that—

a they are the same sum of money or asset, or b sum or asset P directly, or indirectly, represents sum or asset Q.

5 In subsection (2)(b)—

a the reference to A includes a reference to any person linked with A, and b the reference to a liability for income tax does not include a reference to a liability for income tax arising by reason of section 175 (benefit of taxable cheap loan treated as earnings).