Jurisdiction(s):
United Kingdom

UK FTT in Moran v HMRC: TOAA s 731: benefit of rent-free occupation matched via associated operations; motive defence rejected; no EU free movement of capital breach

Published on: 05 June 2025

Published by a LexisNexis Private Client expert

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Article summary

Moran v Revenue and Customs Commissioners [2025] UKFTT 540 (TC) What are the practical implications of this case?

Although there have been many decisions examining the charge under the transfer of assets abroad code in Chapter 2 of ITA 2007, Pt 13 in relation to transferors, the authorities offer far thinner guidance on the position where income is matched to benefits enjoyed by a UK resident. Moran is a rare illustration of the courts wrestling with the consequences and operation of that charge. What matters particularly in Moran is the First-tier Tribunal’s (the FTT) way of tying the benefits received to the transactions that led to income arising to a person outside the UK. There were at least two transfers of assets. The transfer that plainly produced a benefit did not give rise to income in the hands of a person abroad. The central question, therefore, was whether that benefit was supplied from assets available by virtue of a transfer that did produce income for a person abroad, or from an operation associated with that transfer. The FTT’s approach to this question, concerning the linkage between benefits and the income-generating transactions in relation to persons abroad and associated operations, is...

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