INTM600040 - Transfer of assets abroad

Overview of ICTA88/S741exemption

See INTM600020 for an overview of ICTA88/S739, and INTM600030 for an overview of ICTA88/S740.

The legislation in ICTA88/S739 and ICTA88/S740 applies unless the taxpayer (the transferor in the case of Section 739, or the recipient of the benefit in the case of Section 740) can show that ICTA88/S741 applies. The taxpayer must be able to demonstrate either:

1. that avoidance of taxation was not the purpose or one of the purposes for which the transfer or any associated operation was effected

2. that the transfer and any associated operations were genuine commercial transactions AND were not designed for the purpose of avoiding liability to taxation.

In this context `taxation' includes the avoidance of any UK tax liability including for example Inheritance Tax and Capital Gains Tax as well as Income Tax. Any claim that the exemption in Section 741 (a) or (b) applies should be referred to the Centre for Non-Residents, Bootle, S739 Group, (see INTM600050). Inspectors should not, in any circumstances, offer a view to the taxpayer or agent as to the validity of such a claim.

There is no provision for a "clearance" or other advance ruling on the application of Section 741. Claims to Section 741 may appear as a tick in Box 6.5A on the Foreign Pages of the Self Assessment Return. The 'white spaces' of a return may contain additional information about a Section 741 claim, or information about a claim may be submitted separately. Such cases should be referred to the Centre for Non-Residents before any decision is taken whether or not to open enquiries under Section 9A TMA 1970.