Income Tax (Trading and Other Income) Act 2005 (c. 5)

Part 5 U.K. Miscellaneous income

Chapter 5 U.K. Settlements: amounts treated as income of settlor [F1 or family]

Textual Amendments

F1 Words in Pt. 5 Ch. 5 heading inserted (with effect in accordance with Sch. 10 para. 21 of the amending Act) by Finance Act 2018 (c. 3), Sch. 10 para. 3(2)

[F2 Benefits matched with protected foreign-source income U.K.

Textual Amendments

F2 Ss. 643A-643N and cross-heading inserted (with effect in accordance with Sch. 10 para. 21 of the amending Act) by Finance Act 2018 (c. 3), Sch. 10 para. 11 (with Sch. 10 para. 22)

643L Cases where settlor liable following onward gift U.K.

(1) Subsection (3) applies if—

(a) this section applies (see section 643I(1)),

(b) the subsequent recipient is a close member of the settlor's family (see section 643H) when the onward payment is made,

(c) the subsequent recipient is UK resident for the charging year,

(d) section 809B, 809D or 809E of ITA 2007 applies to the subsequent recipient for the charging year,

(e) none, or part only, of the onward payment is remitted to the United Kingdom in the charging year,

(f) there is a time in the charging year when the settlor is UK resident,

(g) there is no time in the charging year when the settlor is domiciled in the United Kingdom, and

(h) there is no time in the charging year when the settlor is regarded for the purposes of section 809B(1)(b) of ITA 2007 as domiciled in the United Kingdom as a result of section 835BA of ITA 2007 having effect because of Condition A in that section being met.

(2) Subsection (3) also applies if—

(a) this section applies (see section 643I(1)),

(b) the subsequent recipient is a close member of the settlor's family when the onward payment is made,

(c) the subsequent recipient is non-UK resident for the charging year,

(d) there is a time in the charging year when the settlor is UK resident,

(e) there is no time in the charging year when the settlor is domiciled in the United Kingdom, and

(f) there is no time in the charging year when the settlor is regarded for the purposes of section 809B(1)(b) of ITA 2007 as domiciled in the United Kingdom as a result of section 835BA of ITA 2007 having effect because of Condition A in that section being met.

(3) For income tax purposes, an amount of income—

(a) equal to the amount or value of so much of the onward payment as is within any of sub-paragraphs (i) to (iii) of section 643I(1)(e), or

(b) where this subsection applies because of subsection (1) in a case where part only of that much of the onward payment is remitted to the United Kingdom in the charging year, equal to the amount or value of the remainder of that much of the onward payment,

is treated as arising to the settlor for the charging year, subject to subsection (4).

(4) The amount given by subsection (3) (before adjustment under this subsection) is to be adjusted as follows—

(a) deduct any part of the amount on which the settlor is liable to income tax otherwise than under this section, and

(b) if following any adjustment under paragraph (a) the amount exceeds the amount mentioned in section 643I(1)(a), deduct the excess.

(5) Where any tax for which the settlor is liable as a result of subsections (3) and (4) is paid, the settlor is entitled to recover the amount of the tax from the subsequent recipient.

(6) For the purpose of recovering that amount, the settlor is entitled to require an officer of Revenue and Customs to give the settlor a certificate specifying—

(a) the amount of the income concerned, and

(b) the amount of tax paid,

and any such certificate is conclusive evidence of the facts stated in it.]