Finance Act 2006

3 (1) For section 686A of ICTA substitute—

“686A Receipts to be treated as income to which section 686 applies

(1) Where the trustees of a settlement (other than the trustees of a unit trust scheme)—

(a) receive or are entitled to a payment of a kind specified in subsection (2), or

(b) are liable for tax in respect of a gain on a chargeable event of a kind specified in subsection (2),

the payment or gain shall be treated as if it were income to which section 686 applies.

(2) Those payments and gains are—

(a) a payment made by a company—

(i) on the redemption, repayment or purchase of its own shares, or

(ii) on the purchase of rights to acquire its own shares,

(b) a gain arising on a chargeable event in respect of which the trustees are liable for tax under section 467 of ITTOIA 2005 (gains on contracts for life insurance, etc), other than a gain to which subsection (7)(a) of that section applies,

(c) if the trustees are resident in the United Kingdom, a profit on the disposal of a deeply discounted security in respect of which the trustees are liable for tax under section 429 of ITTOIA 2005,

(d) a sum to which Chapter 4 of Part 3 of ITTOIA 2005 applies,

(e) a profit on the disposal of a future or option in respect of which the trustees are liable for tax under section 557 of ITTOIA 2005, if none of conditions A to C in section 568 of that Act are met,

(f) a profit on the disposal of a deposit in respect of which the trustees are liable for tax under section 554 of ITTOIA 2005,

(g) the proceeds of sale of a foreign dividend coupon in respect of which the trustees are liable for tax under section 573 of ITTOIA 2005,

(h) a sum which is chargeable to tax under section 68(2) or 71(4) of the Finance Act 1989 (c. 26) (employee share ownership trusts: chargeable events),

(i) an offshore income gain (within the meaning of section 761 of this Act), and

(j) a gain on a disposal of land to which section 776 of this Act applies.”

(2) This paragraph shall have effect in respect of payments made, or gains arising, to the trustees of a settlement on or after 6th April 2006.