½Û×ÓÊÓƵ

B2.225 Trading income provided through third parties

Specific anti-avoidance provisions exist to prevent trading profits disguised as other receipts escaping the charge to tax¹. These rules apply to trades, professions, vocations and to partners and individuals alike²

Where the rules apply, the disguised profits (referred to as a 'relevant benefit') are treated as a trading profit and taxed accordingly³.

A relevant benefit can be a payment (including a loan), a transfer of money's worth or any other benefit⁴. In essence therefore virtually anything can be a relevant benefit. It can also be indirect assumptions of liabilities⁵.

The amount of the relevant benefit to be included in the profits is either the amount of the payment or the principal lent of a loan, or in any other case, the higher of the market value or the cost of providing the benefit⁶.

The charge to tax will arise in the year in which the relevant benefit arises or, if trading has ceased before that year, the