PART XV SETTLEMENTS
F1Chapter IA Liability of settlor
Main provisions
660A Income arising under settlement where settlor retains an interest.
F2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
660B Payments to unmarried minor children of settlor.
F3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
660C Nature of charge on settlor.
(1)
F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F5(1A)
F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2)
F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3)
F6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F7(4)
F8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
660D Adjustments between settlor and trustees, &c.
F9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplementary provisions
660E Application to settlements by two or more settlors.
F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
660F Power to obtain information.
F11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
660G Meaning of “settlement” and related expressions.
F12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CHAPTER I DISPOSITIONS FOR SHORT PERIODS
F1660 Dispositions for period which cannot exceed six years.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1661 Adjustments between disponor and trustees.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1662 Application of Chapter I to dispositions by two or more disponors.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CHAPTER II SETTLEMENTS ON CHILDREN
F1663 The general rule.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1664 Accumulation settlements.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1665 Meaning of “irrevocable”.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1666 Interest paid by trustees.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1667 Adjustments between disponor and trustees.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1668 Application of Chapter II to settlements by two or more settlors.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1669 Power to obtain information under Chapter II.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1670 Interpretation of Chapter II.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F13CHAPTER 1B PROVISIONS AS TO CAPITAL SUMS PAID TO SETTLOR
F1671 Revocable settlements allowing release of obligation.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1672 Revocable settlements allowing reversion of property.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1673 Settlements where settlor retains an interest.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1674 Settlements: discretionary power for benefit of settlor etc.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1674AF14 Other settlements where settlor retains interest in settled property.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1675 Provisions supplementary to sections 671 to 674.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1676 Disallowance of deduction from total income of certain sums paid by settlor.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
677 Sums paid to settlor otherwise than as income.
F15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
678 Capital sums paid by body connected with settlement.
F16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
679 Application of Chapter III to settlements by two or more settlors.
F17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
680 Power to obtain information for purposes of Chapter III.
F18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
681 Interpretation of Chapter III.
F19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
682 Ascertainment of undistributed income.
F20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F21682A Supplementary provisions.
F22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F23CHAPTER 1C LIABILITY OF TRUSTEES
F24. . .
683 Settlements made after 6th April 1965.
F25. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
684 Settlements made before 7th April 1965 but after 9th April 1946.
F26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
685 Provisions supplementary to sections 683 and 684.
F27. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F28. . .
F29685AMeaning of “settled property”
F30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
685BMeaning of “settlor”
F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
685CTransfer between settlements: identification of settlor
F32. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
685DVariation of will or intestacy, etc: identification of settlor
F33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
685ETrustees of settlements
F34. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
685FApplication of section 739 and 740
F35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
685GSub-funds
F36. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
686F37Accumulation and discretionary trusts: special rates of tax.
F38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F39686A Receipts to be treated as income to which section 686 applies
F40. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F41686BShare incentive plans: distributions in respect of unappropriated shares
F42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
686CInterpretation of section 686B
F43. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F44686DSpecial trust rates not to apply to first slice of trust income
F45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F46686EApplication of section 686D where settlor has made more than one settlement
F47. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
687 Payments under discretionary trusts.
F48. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F50687AF49Discretionary payments by trustees to companies.
(1)
This section applies where—
(a)
F51the trustees of a settlement make a payment to a company;
F52(b)
sections 494 and 495 of ITA 2007 apply in relation to the payment; and
(c)
the company is chargeable to corporation tax and does not fall within subsection (2) below.
(2)
A company falls within this subsection if it is—
(a)
a F53charitable company, as defined in section 506(1);
(b)
a body mentioned in section 507 (heritage bodies); or
(c)
an Association of a description specified in section 508 (scientific research organisations).
(3)
Where this section applies—
(a)
none of the following provisions, namely—
(i)
section 7(2),
(ii)
section 11(3),
(iii)
F54section 952 of ITA 2007 (set off of income tax suffered against income tax payable),
shall apply in the case of the payment;
(b)
the payment shall be left out of account in calculating the profits of the company for the purposes of corporation tax; and
(c)
no repayment shall be made of the amount treated under F55section 494 of ITA 2007 as income tax paid by the company in the case of the payment.
(4)
If the company is not resident in the United Kingdom, this section applies only in relation to so much (if any) of the payment as is comprised in the company’s chargeable profits for the purposes of corporation tax.
688 Schemes for employees and directors to acquire shares.
F56. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
689 Recovery from trustees of discretionary trusts of higher rate tax due from beneficiaries.
F57. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F58Chapter ID Trust management expenses
689A Disregard of expenses where beneficiary non-resident.
F59. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
689B Order in which expenses to be set against income.
(1)
The expenses of F60the trustees of a settlement in any year of assessment, so far as they are properly chargeable to income (or would be so chargeable but for any express provisions of the trust), shall be treated—
(a)
as set against so much (if any) of any income as is income falling within subsection (2) F61, (2A) or (3) below before being set against other income; and
(b)
(c)
as set against so much (if any) of any income as is income falling within subsection (2) below before being set against income falling within subsection (2A) below.
(2)
Income falls within this subsection if it is—
F64(a)
so much of the income of the trustees as is income chargeable under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.);
(b)
income treated as arising to the trustees under Chapter 5 of that Part (stock dividends from UK resident companies); or
(c)
income chargeable under Chapter 6 of that Part (release of loan to participator in close company).
F65(2A)
Income falls within this subsection if it is F66—
(a)
income chargeable under Chapter 4 of Part 4 of ITTOIA 2005 (dividends from non-UK resident companies); or
(b)
a relevant foreign distribution chargeable under Chapter 8 of Part 5 of that Act (income not otherwise charged).
F67(2B)
In subsection (2A) “relevant foreign distribution” means any distribution of a company not resident in the United Kingdom which—
(a)
is not chargeable under Chapter 4 of Part 4 of ITTOIA 2005, but
(b)
would be chargeable under Chapter 3 of that Part if the company were resident in the United Kingdom.
(3)
Income falls within this subsection if it is income F68of the trustees which is savings income (within the meaning of section 18 of ITA 2007).
(4)
F69. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F70(5)
This section applies for corporation tax purposes only.
CHAPTER V MAINTENANCE FUNDS FOR HISTORIC BUILDINGS
690 Schedule 4 directions.
F71. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
691 Certain income not to be income of settlor etc.
F72. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
692 Reimbursement of settlor.
F73. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
693 Severance of settled property for certain purposes.
F74. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
694F75Trustees chargeable to income tax in certain cases at higher rate reduced by rate applicable to trusts
F76. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .