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In Andreas Rialas v HMRC [2019] TC07316 the FTT found the Transfer of Assets abroad rules did not apply to dividend income: Mr Rialas was not the transferor of shares acquired by his offshore family trust from his former business partner.

The Transfer of Assets Abroad rules (TOAA)  are anti-avoidance rules designed to prevent UK residents transferring the ownership of assets overseas whilst continuing to benefit from the income from those assets without suffering UK income tax on them. They were originally in s739-746 ICTA 1998, now s714-751 of Income Tax Act 2007.

Mr Rialas was a non-domiciled UK resident for the tax years in question. He owned 50% of a UK company, Argo, and wished to buy out his business partner Mr Cressman to enable a third-party sale to take place:

HMRC assessed Mr Rialas to income tax of £1,094,067 on the dividends paid by Argo:

Mr Rialas claimed:

The FTT allowed the appeal:

Links to our guides:

Transfer of assets abroad (TOA)

Non-resident trusts 

External link:

Andreas Rialas v HMRC [2019] TC07316