Overview
1340.This Chapter contains an introduction to the Part and some basic definitions.
1341.There is no attempt to define a settlement or particular types of settlement, although Chapter 2 defines “settled property” and “settlor”.
1342.While it is often useful in practice to categorise a settlement either as an interest in possession settlement (under which the beneficiaries are entitled to the settlement income as it arises) or as an accumulation or discretionary settlement (under which income can be accumulated or paid to beneficiaries at the trustees’ discretion), some settlements are mixed (in that there are both sorts of beneficiary).
1343.The rules in this Part are written so that they apply having regard to the treatment of the income rather than the type of settlement.
Section 462: Overview of Part
1344.This section introduces the Part. It is new.
Section 463: Interpretation of Part
1345.This section provides definitions for the purpose of the Part. It is based on sections 686(6) and 687(4) of ICTA.
Section 464: Scottish trusts
1346.This section concerns beneficiaries of Scottish trusts. It is based on section 118(1) of FA 1993.
1347.For certain income tax purposes, trusts under which the beneficiaries have an equitable right in possession are treated differently to discretionary trusts. Scottish law does not recognise the concept of an equitable right in possession. So this section provides for the law of England and Wales to be applied for the purpose of determining whether beneficiaries under a Scottish trust have an equitable right in possession for income tax purposes.
