Income Tax (Trading and Other Income) Act 2005

Other supplementary provisions U.K.

646 Adjustments between settlor and trustees etc. U.K.

(1) A settlor is entitled to recover from—

(a) any trustee, or

(b) any other person to whom the income is payable in connection with the settlement,

the amount of any tax paid by the settlor which became chargeable on the settlor under section 624 or 629.

(2) For this purpose, the settlor may require [F1 an officer of Revenue and Customs] to provide the settlor with a certificate specifying—

(a) the amount of income in respect of which the settlor has so paid tax, and

(b) the amount of tax so paid.

(3) A certificate provided under subsection (2) is conclusive evidence of the facts stated in it.

(4) Subsection (5) applies if—

(a) a settlor obtains a repayment of tax in respect of an allowance or relief, and

(b) the repayment is in excess of the amount of the repayment to which the settlor would have been entitled but for sections 624 to 632.

(5) The settlor must pay an amount equal to the excess to—

(a) the trustee, or

(b) the other person to whom the income is payable by virtue of or as a result of the settlement.

(6) If there are two or more such persons, the amount must be apportioned among them as the case may require.

(7) Any question as to—

(a) the amount of a payment under subsection (5), or

(b) an apportionment to be made under subsection (6),

is to be decided by the [F2 tribunal and, notwithstanding the provisions of sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007, the decision of the tribunal is final] .

(8) Nothing in sections 624 to 632 is to be read as excluding a charge to tax on the trustees as persons by whom any income is received.

Textual Amendments

F1 Words in s. 646(2) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 ss. 50, 53(1), {Sch. 4 para. 132(1)}; S.I. 2005/1126, art. 2(h)

F2 Words in s. 646(7) substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 441

[F3 646A Trustees' expenses to be rateably apportioned U.K.

(1) This section applies if—

(a) in a tax year qualifying income arises under a UK settlement, and

(b) the qualifying income consists of charitable income and non-charitable income.

(2) If expenses of the trustees are to be set against the charitable income by virtue of section 484 of ITA 2007, the amount of those expenses which can used for that purpose is limited to the amount allocated to the charitable income.

(3) If—

(a) Chapter 8 of Part 9 of ITA 2007 applies in relation to the charitable income, and

(b) expenses of the trustees are to be used to reduce the charitable income for income tax purposes,

the amount of those expenses which can used for that purpose is limited to the amount allocated to the charitable income.

(4) For the purposes of subsections and (3) the amount of the expenses allocated to the charitable income is determined by apportioning them rateably between the charitable income and the non-charitable income.

(5) In this section—

• “charitable income” means income within section 628(1) or 630(1),

• “non-charitable income” means income which is not charitable income, and

• “qualifying income” and “UK settlement” have the same meaning as in section 628.]

Textual Amendments

F3 S. 646A inserted (6.4.2007 with effect as stated in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1034, Sch. 1 para. 560 (with transitional provisions and savings in Sch. 2)

647 Power to obtain information U.K.

(1) [F4 an officer of Revenue and Customs] may by notice require any party to a settlement to provide [F5 the officer] , within such period as [F6 the officer] may direct, with such particulars as [F6 the officer][F7 considers] necessary for the purposes of this Chapter.

(2) The period concerned must be not less than 28 days.

Textual Amendments

F4 Words in s. 647(1) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), ss. 50, 53(1), Sch. 4 para. 132(1); S.I. 2005/1126, art. 2(h)

F5 Words in s. 647(1) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), ss. 50, 53(1), Sch. 4 para. 133(4)(a); S.I. 2005/1126, art. 2(2)(h)

F6 Words in s. 647(1) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 50, 53(1), Sch. 4 para. 133(4)(b); S.I. 2005/1126, art. 2(2)(h)

F7 Word in s. 647(1) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), ss. 50, 53(1),{Sch. 4 para. 133(4)(c)}; S.I. 2005/1126, art. 2(2)(h)

648 Income arising under a settlement U.K.

(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.