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No compulsion
Key points
- The ruling in the Rialas case illustrates important points on the transfer of assets abroad rules.
- A dispute over the operation of a UK company led to a purchase of shares on which dividends were later paid.
- A non-UK family trust was established for the benefit of the taxpayer’s family.
- HMRC argued that the taxpayer was liable to income tax under TA 1988 s 739(1).
- The tribunal agreed with the taxpayer that the transfer of assets abroad provisions did not apply because the conditions in TA 2007 s 739 were not met.
- The tribunal also agreed with the taxpayer that the transfer of assets abroad rules must be disapplied because they were penal and in conflict with the EU freedom of capital movement rules.
On 7 August 2019 the First-tier Tribunal issued judgment in favour of the taxpayer in Andreas Rialas (TC7316). The case concerned the transfer of assets abroad rules (TA 1988...
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