Part 5

Miscellaneous income
Chapter 5

Settlements: amounts treated as income of settlor or family

Capital sums treated as income of settlor: connected bodies

Exception for certain loans or repayments of loans
642
1
Section 641 does not apply to any sum paid to the settlor by way of loan or repayment of a loan if conditions A and B are met.
2
Condition A is that the whole of the loan is repaid within 12 months of the date on which it was made.
3
Condition B is that the period for which amounts are outstanding in respect of relevant loans in any period of 5 years is not more than 12 months.
4
In subsection (3) “relevant loans” means loans made—
a
to the settlor by the body corporate connected with the settlement or by any other body corporate so connected, or
b
by the settlor to the body corporate connected with the settlement or to any other body corporate so connected.
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)