(1)If the defendant transfers property to another person for a consideration whose value is significantly less than the value of the property at the time of the transfer, he is to be treated as making a gift.
(2)If subsection (1) applies the property given is to be treated as such share in the property transferred as is represented by the fraction—
(a)whose numerator is the difference between the two values mentioned in subsection (1), and
(b)whose denominator is the value of the property at the time of the transfer.
(3)References to a recipient of a tainted gift are to a person to whom the defendant has made the gift.
Cases considering section 78 7
[2018] EWCA Crim 682 · 28 March 2018Interprets
The court construed the gifts-and-recipients provisions in their statutory confiscation context. They require an objective monetary comparison, not an assessment based on matrimonial fairness or the parties’ own view of their relationship. (see paras [34]; [43]-[47])
Consideration must be objectively evidenced, attributable to the transfer, and capable of monetary valuation. Non-financial family services are not automatically excluded, but did not amount to valuable consideration on these facts. (see paras [34]; [43]-[47]; [55]-[59])
Where consideration is significantly less than the transferred property’s value, the court must apply the prescribed fraction to identify the property treated as given. The court confirmed that this follows the statutory comparison under section 78(1). (see paras [34]; [58]-[60])
[2008] EWCA Crim 1841 · 23 July 2008Defines
The court applied the definition of a gift at a significant undervalue. It held that the definition affects available amount and does not prevent the transfer taking its ordinary legal effect (see paras [18]-[19]).
[2020] EWCA Crim 1345 · 14 October 2020Limits
The court treated this as one of the tainted-gift provisions which the prosecution had disclaimed. It was therefore not available to alter the third party’s interests in the section 10A determination. (see paras [8]; [20]; [36])
What each judgment says about section 78 is in the case-law panel in the full Act.