Introduction Overview Overview Section 637: Transfer of rights to payment
1986.This section charges sums received in respect of transfers of rights as if those sums were winding up receipts. It is based on paragraph 5 of Schedule 12 to F(No 2)A1992.
1987.In the case of a non-arm’s length transaction the source provided that market value was to be substituted for the consideration received. However, the tax charge was based on amounts received. In relation to the deemed amounts arising from non-arm’s length transactions the source,therefore, stated that “references … to sums received shall be construed accordingly.”
1988.Although the meaning was not in doubt the source was not as clear as it might have been. In the rewritten section a slightly different approach is adopted by explicitly treating the value of transferred rights as winding up receipts.