Commentary on Sections Overview Overview Section 733: Income charged under section 731
2166.This section sets out in a method statement the rules for determining the amount (if any) of income treated as arising under section 731. It is based on sections 740(2) and (3) and 741C(7) of ICTA.
2167.It also spells out some implications which involve minor changes to the law. See Change 113 in Annex 1.
2168.In broad terms, the effect of this section and section 734 is:
	to tax non-transferors on benefits which they receive (but only on the amount or value of those benefits);
	to ensure that tax will only be charged on a benefit to an individual if income has arisen by the use of which such benefits could be provided; and
	to ensure nevertheless that tax will not be avoided merely by conferring the benefit before the “relevant income” is actually available.
2169.The method statement in this section will make no practical difference to taxpayers’ record-keeping obligations.
2170.The method statement makes it clear that “relevant income” in relation to an individual is not actually taxable income of the individual, but is an element in the calculation of taxable income. “Relevant income” is actual income arising to a person abroad; the income charged under section 731 is income treated as arising to the individual in question. This deemed income may be more or less than “the relevant income of the tax year” in relation to the individual and the tax year identified at Step 3.
2171.The Act will have effect for income tax purposes for 2007-08 and later tax years. But the calculation of income charged under section 731 in (for example) 2007‑08 will take account of “relevant income” in relation to the individual, not only of 2007-08 but (if the statutory conditions were satisfied) of earlier tax years – whether or not the individual had any liability under section 740 of ICTA for those tax years.