Part 6Exempt income
Chapter 8Other annual payments
Certain annual payments by individuals
729Payments for non-taxable consideration
1
A payment that meets condition A is only exempt from income tax under section 727(1) if condition B or C is met.
2
Condition A is that—
a
the payment is made under a liability incurred at any time for consideration in money or money's worth, and
b
some or all of the consideration is not required to be brought into account in calculating the payer's income for income tax purposes.
3
Condition B is that the payment is income within section 627(1) (payments on F1dissolution or separation) in the recipient's hands.
4
Condition C is that the payment is made to an individual under a liability incurred at any time in consideration of the individual surrendering, assigning or releasing an interest in settled property to or in favour of a person with a subsequent interest.
5
In the application of subsection (4) to Scotland, the reference to settled property is to be read as a reference to property held in trust.