Section 174 - Avoidance of income-tax by transactions resulting in transfer of income to non-residents.

Rebuttable deeming rule taxes non-resident income when transfer grants power to enjoy income, excluding later actual receipts

Where a transfer (alone or with associated operations) causes income to be payable to a non-resident, the statute treats that income as the income of the transferring/acquiring person if by the transfer they obtain power to enjoy the non-resident's income or receive related capital sums. Such deemed income is taxable for all purposes, but once taxed and later actually received it is not again included. The deeming rule is rebuttable if the taxpayer satisfies the assessing officer that the transfer and associated operations were not undertaken to avoid tax or were bona fide commercial transactions. Broad definitions govern 'assets,' 'associated operations,' 'benefit,' 'capital sum' and what constitutes power to enjoy income.