INTM600260 - Transfer of assets abroad: General conditions: Assets

The meaning of ‘assets’ for the purposes of the legislation is at ITA07/S717. It is another term given a very wide meaning for the purpose of the transfer of assets provisions as it includes property or rights of any kind.

There is, however, some further amplification. References to assets representing any assets, income or accumulations of income are said to include:

• shares in or obligations of any company to which the assets, income or accumulations are or have been transferred, or
• obligations of any other person to whom the assets, income or accumulations are or have been transferred.

Assets can be tangible, such as shares, securities or other forms of real property, or intangible, like the creation of rights, such as the rights created by a service contract or contract of employment. For example, where an individual resident in the UK places his services at the disposal of a foreign company, the agreement creates a right for the company to control his activities and by virtue of that right the company earns income.

The making of such a service agreement is therefore considered to constitute a transfer of an asset. This interpretation was upheld by Hoffman J in his judgement in the case of CIR v Brackett (60 TC 134).