ITO Section 90 | Transfers of assets.

ITO Section 90

Transfers of assets. 

(1) For the purposes of this Ordinance and subject to sub-section (2), where there has been a revocable transfer of an asset, any income arising from the asset shall be treated as the income of the transferor and not of the transferee.

(2) Sub-section (1) shall not apply to any income derived by a person by virtue of a transfer that is not revocable during the lifetime of the person and the transferor derives no direct or indirect benefit from such income.

(3) For the purposes of this Ordinance, where there has been a transfer of an asset but the asset remains the property of the transferor, any income arising from the asset shall be treated as the income of the transferor.

(4) For the purposes of this Ordinance and subject to sub-section (5), any income arising from any asset transferred by a person directly or indirectly to—

• (a) the person’s spouse or minor child; or
• (b) any other person for the benefit of a person or persons referred to in clause (a),

shall be treated as the income of the transferor.

(5) Sub-section (4) shall not apply to any transfer made —

• (a) for adequate consideration; or
• (b) in connection with an agreement to live apart.

(6) For the purposes of clause (a) of sub-section (5), a transfer shall not be treated as made for adequate consideration if the transferor has provided, by way of loan or otherwise, to the transferee, directly or indirectly, with the funds for the acquisition of the asset.

(7) Sub-section (5) does not apply where the transferor fails to produce evidence of the transfer of the asset by way of its registration or mutation in the relevant record and the income arising from the asset shall be treated as the income of the transferor for the purposes of this Ordinance.

(8) For the purposes of this section, —

• (a) a transfer of an asset shall be treated as revocable if —

(i) there is any provision for the re-transfer, directly or indirectly, of the whole or any part of the asset to the transferor; or
(ii) the transferor has, in any way, the right to resume power, directly or indirectly, over the whole or any part of the asset;

• (b) “minor child” shall not include a married daughter; and
• (c) “transfer” includes any disposition, settlement, trust, covenant, agreement or arrangement.