Tyas & Company
Chartered Accountants, Registered Auditors, Tax, Business Advisors
Friday, 15 March 2019 00:01

Sale of income by an individual

A capital sum received by an individual in respect of the sale or relinquishment of income to be derived from his or her personal activities, can sometimes be treated as earned income and chargeable to Income Tax. If this is the case, the amount charged to Income Tax is not also charged to Capital Gains Tax.

The following conditions must all be present before the sale of income legislation can operate:

  1. The individual must be carrying on an occupation wholly or partly in the UK.
  2. Transactions or arrangements must have been affected putting some other person in a position to exploit the earnings capacity of that individual.
  3. A 'capital amount' must have been obtained by the individual or for some other person, as part of, or in connection with, or in consequence of the transactions or arrangements.
  4. The main object, or one of the main objects, of the transactions or arrangements must be the avoidance or reduction of liability to Income Tax.
 

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Stephen Tyas                             Stephen Ayres

 

 

Registered to carry on audit work in the UK as GBJ
Limited Liability Partnership by the Institute of
Chartered Accountants in England and Wales

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