INTM601180 - Transfer of assets abroad: The income charge: Measure of income - accrued income scheme

Amounts corresponding to accrued income profits and related interest are within the transfer of assets provisions.

The legislation came into effect on 28 February 1986 and is now at ITA07/S747. These provisions were introduced to counteract the loss of tax to HMRC via bond washing, where funds that would otherwise have been received as income were converted into capital, therefore reducing or removing a liability to tax.

A person abroad might hold securities which are such that, if it had been UK resident, it would have suffered an accrued income charge. The provisions provide for the accrued income charge to be treated as income becoming payable to the person abroad and so to be taken into account in arriving at the amount subject to the income charge.