Part 5

Miscellaneous income
Chapter 5

Settlements: amounts treated as income of settlor or family

Income treated as income of settlor: retained interests

Exception for gifts to charities
628
1
The rule in section 624(1) does not apply to any qualifying income which arises under a UK settlement if—
a
it is given by the trustees to a charity in the tax year in which it arises, or
b
it is income to which a charity is entitled under the terms of the trust.
2
In this section “qualifying income” means—
a
income which must be accumulated,
b
income which is payable at the discretion of the trustees or any other person . . .
c
income which (before being distributed) is income of any person other than the trustees.
2A
The cases covered by subsection (2)(b) include cases where the trustees have, or any other person has, any discretion over one or more of the following matters—
a
whether, or the extent to which, the income is to be accumulated,
b
the persons to whom the income is to be paid, and
c
how much of the income is to be paid to any person.
3
Subsection (4) applies if in any tax year qualifying income which arises under a UK settlement from different sources exceeds the total of—
a
the amount of that income which falls within subsection (1), and
b
the amount of that income which falls within section 630(1) (comparable exception for income of relevant children of settlor).
4
The amount of the qualifying income from different sources which falls within subsection (1) above is rateably apportioned between those sources.
5
This does not affect the operation of any requirement that the whole, or any specified part, of the income from a particular source is to be given to a charity.
6
In this section—
- “charity” includes
  1. the Trustees of the National Heritage Memorial Fund,
and
  2. the Historic Buildings and Monuments Commission for England...
...
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- “
UK
settlement
” means a settlement the trustees of which are resident
... in the United Kingdom.
S. 628(6): words in definition of 'charity' substituted (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. 555(4)(a)} (with transitional provisions and savings in Sch. 2)
Words in s. 628(2)(a) substituted (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. 555(2)(a) (with transitional provisions and savings in Sch. 2)
Words in s. 628(2)(b) repealed (6.4.2007 with effect as stated in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1031, 1034, Sch. 1 para. 555(2)(b), Sch. 3 Pt. 1 (with transitional provisions and savings in Sch. 2)
S. 628(6): definition of 'resident' and subsequent word repealed (6.4.2007 with effect as stated in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1031, 1034, Sch. 1 para. 555(4)(b), Sch. 3 Pt. 1 (with transitional provisions and savings in Sch. 2)
S. 628(2A) 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. 555(3) (with transitional provisions and savings in Sch. 2)
Word in s. 628(3)(b) substituted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1, 191
Words in s. 628(6) omitted (6.4.2015) by virtue of The Income Tax (Removal of Ordinary Residence) Order 2014 (S.I. 2014/3062), arts. 1(1), 2
Word in s. 628(6) inserted (1.4.2012) by The Public Bodies (Abolition of the National Endowment for Science, Technology and the Arts) Order 2012 (S.I. 2012/964), arts. 1(2), 3(1), Sch.
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)
Words in s. 628(6) omitted (1.4.2012) by virtue of The Public Bodies (Abolition of the National Endowment for Science, Technology and the Arts) Order 2012 (S.I. 2012/964), arts. 1(2), 3(1), Sch.
Words in s. 628 substituted (retrospective to 6.4.2006) by Finance Act 2006 (c. 25), Sch. 13 para. 33(1)(5)
Words in s. 628(6) substituted (retrospective to 6.4.2006) by Finance Act 2006 (c. 25), Sch. 13 para. 33(2)(5)