Income Tax (Trading and Other Income) Act 2005

472 Trusts created by two or more persons

(1) For the purposes of this Chapter, if immediately before a chargeable event—

(a) the rights under a policy or contract are held on non-charitable trusts created by two or more persons, or

(b) a share in those rights is so held,

each of the persons is treated as the sole settlor of a separate share of the rights or share held on trusts.

(2) Each settlor’s separate share is proportionate to the share originating from that settlor of the whole of the property subject to the trusts immediately before the event.

(3) If immediately before a chargeable event non-charitable trusts apply to property originating from different persons (for example, where property is added by different persons to an existing settlement)—

(a) as respects that event the trusts are taken to have been created by them all, and

(b) accordingly, each of them is treated as a sole settlor under subsection (1).

(4) Property originates from a person for the purposes of subsections (2) and (3) if—

(a) it is property provided by the person for the purposes of the trusts,

(b) it is property representing such property, or

(c) in a case where property represents both property within paragraph (a) and other property, it is so much of that property as, on a just and reasonable apportionment, is to be taken to represent the property within paragraph (a).

(5) References in subsection (4) to property representing other property include property representing accumulated income from other property.

(6) For the purposes of this section, property is treated as provided by a person (“A”) if—

(a) it is provided by A directly or indirectly, or

(b) it is provided directly or indirectly by another person under reciprocal arrangements with A.

(7) Property is not treated as provided by A if it is provided by A directly or indirectly under reciprocal arrangements with another person.