Commentary on Sections Overview Overview Section 729: The capital receipt conditions
2156.This section is concerned with the expression “receives or is entitled to receive any capital sum”. It is based on section 739(3) to (6) of ICTA.
2157.This section also makes it clear that where liability arises because an individual has only an entitlement to receive a capital sum, rather than actual receipt, then liability under section 727 continues only for as long as the entitlement to receive a capital sum exists. See Change 111 in Annex 1.
2158.If the entitlement to the capital sum ceases because the capital sum is actually paid to the transferor (either in whole or in part), then the receipt of the capital sum does result in continuing liability under this section; subsection (1) reflects this.
2159.Subsection (2) makes an exception to this rule. If a sum is received by way of loan, this does not give rise to liability if the loan is wholly repaid before the tax year begins. Subsection (2) is based on section 739(6) of ICTA.
2160.Subsection (4) comments on the expression “receives or is entitled to receive” in subsection (1).