INTM601500 - Transfer of assets abroad: The benefits charge: Which charge applies?

It is possible that for the same tax year an individual could appear to meet the conditions to be potentially chargeable under both the income charge and the benefits charge. However, ITA07/S732(1) makes it clear that an essential condition for the benefits charge is that the individual is not liable to an income charge by reference to the transfer. In effect therefore, if it appeared that either charge may apply, the income charge will take precedence.

If there is more than one individual who receives a benefit and is thus potentially chargeable under the benefits charge, see INTM601740.

If there is one individual who is chargeable by reference to the transfer under the income charge, and one or more individuals who receive benefits and are thus potentially chargeable under the benefits charge, the computation of the amount chargeable under the benefits charge should resolve any conflict by effectively applying the ‘no duplication of charges’ rule (INTM602380). The computation of the amount chargeable under the benefits charge is dealt with at INTM601720.

Where the receipt of a benefit gives rise to a potential capital gains tax charge and an income tax benefits charge see INTM601520.