Finance (No. 2) Act 2017

34 (1) Section 731 (charge to tax on income treated as arising under section 732) is amended as follows. U.K.

(2) In subsection (1), for “non-transferors” substitute “ individuals ”.

(3) After subsection (1) insert—

“(1A) But where the individual is non-UK resident for the tax year in which a benefit is received, there is a charge to tax under this section on any matched deemed income—

(a) only so far as that matched deemed income would under section 735A (if it applied also for this purpose) be matched with an amount of relevant income that is protected income for the purposes of section 733A(1)(b)(i) (see sections 721(3BA) and 728(1B)), and

(b) only if—

(i) the individual is the settlor of the settlement concerned, or

(ii) the benefit is received by the individual at a time when the individual is a close member of the family of the settlor of that settlement.

(1B) For the purposes of subsection (1A)—

(a) “matched deemed income” means income which—

(i) is treated by section 732 as arising to the individual, and

(ii) would, if section 735A applied also for this purpose, be matched under that section with the benefit, and

(b) a person is a close member of the family of the settlor of a settlement if the person is—

(i) the settlor's spouse or civil partner, or

(ii) a child of the settlor, or of a person within sub-paragraph (i), if the child has not reached the age of 18;

and section 733A(7) (persons living together) applies also for the purposes of paragraph (b).”

(4) In subsection (3) (person liable for tax is person to whom income is treated as arising), at the end insert “, but this is subject to section 733A.