Income Tax (Trading and Other Income) Act 2005

648 Income arising under a settlement

(1) References in this Chapter to income arising under a settlement include—

(a) any income chargeable to income tax by deduction or otherwise, and

(b) any income which would have been so chargeable if it had been received in the United Kingdom by a person domiciled, resident and ordinarily resident there.

(2) But this is subject to the rule in subsection (3) which applies if, in a tax year, the settlor is—

(a) not domiciled in the United Kingdom,

(b) not UK resident, or

(c) not ordinarily UK resident.

(3) The rule is that references in this Chapter to income arising under a settlement do not include income arising under the settlement in that tax year in respect of which the settlor, if the settlor were actually entitled to it, would not be chargeable to income tax by deduction or otherwise because of the settlor not being domiciled in the United Kingdom, UK resident or ordinarily UK resident.

(4) Subsection (5) qualifies the rule in subsection (3) if such income is remitted to the United Kingdom in circumstances such that, if the settlor were actually entitled to the income when remitted, the settlor would be chargeable to income tax because of being UK resident.

(5) The income is treated for the purposes of this Chapter as arising under the settlement in the year in which it is remitted.