Finance Act 1968

Interpretation U.K.

ll (1) The following provisions have effect for the interpretation of this Schedule in a case where the special charge falls to be made in respect of an individual’s aggregate investment income and that income includes any amount arising under a trust. U.K.

(2) For the purposes of this Schedule the amount of the special charge attributable to the trust shall be the fraction of the special charge of which—

(a) the numerator is the individual’s investment income arising under the trust, and

(b) the denominator is the individual’s aggregate investment income, ascertained before making any deduction under section 42(7) of this Act.

(3) Where credit for foreign tax falls to be allowed against the special charge, the amount of the special charge attributable to the trust shall be ascertained—

(a) by applying the fraction in sub-paragraph (2) above to the special charge without allowing the credit against the amount of the special charge, and

(b) by deducting from the resulting amount so much of the credit, if any, as is allowable in respect of income arising from the trust.

(4) For the said purposes “the person originally chargeable” means the individual or other person liable to pay the special charge apart from the provisions of this Schedule.

12 (1) For the said purposes “the person answerable” for a trust is— U.K.

(a) in the case of a subsisting settlement within the meaning of the M1 Settled Land Act 1925, or in Northern Ireland the Settled Land Acts 1882 to 1890, the tenant for fife,

(b) in the case of any other subsisting trust, the trustees.

(2) Where the trust has come to an end, “the person answerable” for the trust is the person who immediately after the trust came to an end was entitled in law to the trust property, either beneficially or as the trustee of property settled under another trust, and if more than one person was then so entitled, those persons shall be severally liable as persons answerable for the trust in proportion to the value of their interests therein.

(3) In applying sub-paragraph (2) above a person becoming entitled by virtue of a mortgage or charge, or in Scotland by virtue of the exercise of a power of sale contained in a bond and disposition in security, shall be disregarded, and sub-paragraph (2) above shall apply to the person or persons who would have been entitled in law to the trust property but for the mortgage or charge. or the exercise of the power of sale.

(4) For the purposes of this paragraph a trust shall be deemed to have come to an end when any person has become entitled thereunder to capital and the trust property has in consequence thereof become vested in that person or an assignee of his interest, and where part of the trust property has become so vested a proportionate part of the amount recoverable from the person answerable for the trust shall be recoverable from the person described in sub-paragraphs (2) and (3) above, and the remainder from the person described in sub-paragraph (1) above, and “subsisting” in relation to a settlement or trust shall be construed accordingly.

Marginal Citations

M1 1925 c. 18.

13 (1) In this Schedule, unless the context otherwise requires— U.K.

• a trust is a “foreign trust” if and only if the general administration of the trust is ordinarily carried on outside the United Kingdom and the trustees or a majority of them for the time being are not resident or not ordinarily resident in the United Kingdom,

• “tenant for life” means, in relation to any settlement, any person who has the powers of a tenant for life under the M2 Settled Land Act 1925 or in Northern Ireland under the Settled Land Acts 1882 to 1890,

• “trustee” includes a personal representative and “trust” shall be construed accordingly,

and references to a trust do not include references to a trust constituted in pursuance of a unit trust scheme as defined in section 26(1) of the M3 Prevention of Fraud (Investments) Act 1958 or section 22 of the M4 Prevention of Fraud (Investments) Act (Northern Ireland) 1940.

(2) In this Schedule references to income of an individual arising under a trust include references to income from property subject to the trust which is treated as the income of that individual for income tax purposes generally, or for surtax.

(3) Where any property or fund is held as to different parts thereof on different trusts, this Schedule shall apply separately to each part.

Marginal Citations

M2 1925 c. 18.

M3 1958 c. 45.

M4 1940 c. 9 (N.I.)