807 Deductions and reliefs in relation to income chargeable to income tax under section 806

Summary

Tax chargeable by virtue of section 806 is charged under Case IV of Schedule D. The normal allowances and reliefs are granted in charging the income in question. A double charge on any income or benefit caught by section 806 will not arise.

Details

(1) Tax chargeable under section 806 is charged under Case IV of Schedule D.

(2) The same deductions and reliefs are to be allowed to the individual as if the income deemed to be his/hers by section 806 had actually been received.

(3) A double charge will not arise on the income caught by section 806 if income deemed to be the income of the taxpayer is subsequently received by the individual as income.

(4) Provision is made for the assessment of any benefit – as distinct from income – within section 806(6)(c) for the year of assessment in which the benefit is received. Any benefit derived directly or indirectly from income which has already been charged to tax is excluded from such assessment.

(5) If an individual receiving income directly would not be chargeable to income tax in respect thereof by virtue of his or her domicile, then any income deemed to be that individual’s by virtue of this section is not chargeable to income tax. In relation to income arising on or after 1 January 2016 this subsection was repealed by FA 2015.

Relevant Date: Finance Act 2021