Part 5Miscellaneous income
Chapter 5Settlements: amounts treated as income of settlor
Capital sums treated as income of settlor: trustees' payments
634Meaning of “capital sum” and “sums paid to settlor”
1
In this Chapter “capital sum” means—
a
any sum paid by way of loan or repayment of a loan, and
b
any other sum which—
i
is paid otherwise than as income, and
ii
is not paid for full consideration in money or money’s worth.
2
But this is subject to subsections (3) to (6).
3
It does not include any sum which could not have become payable to the settlor except—
a
in one of the circumstances mentioned in subsection (2) of section 625, or
b
on the death under the age of 25 of any person of the kind mentioned in subsection (3) of that section.
4
It does include a sum treated as a capital sum by subsection (5) below.
5
Any sum which—
a
is paid by the trustees of a settlement to a third party—
i
at the settlor’s direction, or
ii
as a result of the assignment by the settlor of the settlor’s right to receive the sum, or
b
is otherwise paid, or applied by, the trustees for the benefit of the settlor,
is treated as a capital sum paid to the settlor by the trustees.
6
Subsection (5) does not apply to any sum which would, apart from that subsection, be treated as a capital sum paid to the settlor.
7
References in sections 633 to 638 to sums paid to the settlor include references to sums paid to—
a
the spouse of the settlor, or
b
the settlor (or the spouse of the settlor) jointly with another person.