[F17(1)The condition as to settlor interest in the settlement is that at any time in the relevant period the settlement—U.K.
(a)was a settlor-interested settlement, or
(b)comprised property derived, directly or indirectly, from a settlement that at any time in that period was a settlor-interested settlement.
(2)The relevant period for this purpose is the period—
(a)beginning two years before the beginning of the relevant year of assessment, and
(b)ending with the date of the disposal of the interest in settled property.
This is subject to paragraph 13(3)(d) where the beginning of the disposal and its effective completion fall in different years of assessment.
(3)The relevant period shall not be treated as beginning before 6th April 1999.
If the rule in sub-paragraph (2) (or, where relevant, that in paragraph 13(3)(d)) would produce that result, the relevant period shall be treated as beginning on that date.
(4)For the purposes of this paragraph a “settlor-interested settlement” means a settlement in which a person who is a settlor in relation to the settlement has an interest or had an interest at any time in the relevant period.
The provisions of section [F2169F(2) to (6)] apply to determine for the purposes of this paragraph whether a settlor has (or had) an interest in the settlement.
(5)The condition as to settlor interest in the settlement is treated as not met in a year of assessment—
(a)where the settlor dies during the year, F3...
(b)in a case where the settlor is regarded as having an interest in the settlement by reason only of—
(i)the fact that property is, or will or may become, payable to or applicable for the benefit of his spouse [F4or civil partner], or
(ii)the fact that a benefit is enjoyed by his spouse [F4or civil partner],
where the spouse [F4or civil partner] dies, or the settlor and the spouse [F4or civil partner] cease to be married [F5or to be civil partners of each other], during the year[F6, or
(c)in a case where the settlor is regarded as having an interest in a settlement by reason only of—
(i)the fact that property is, or will or may become, payable to or applicable for the benefit of a dependent child of his, or
(ii)the fact that a benefit is enjoyed by such a child,
where the settlor ceases during the year to have (and does not in that year subsequently come to have) any dependent child in relation to whom section [F7169F(3A)(a) or (b)] applies.]]
Textual Amendments
F1Sch. 4A inserted (with application in accordance with s. 91(3) of the amending Act) by Finance Act 2000 (c. 17), s. 91(2), Sch. 24
F2Words in Sch. 4A para. 7(4) substituted (with effect in accordance with Sch. 2 para. 22 of the amending Act) by Finance Act 2008 (c. 9), Sch. 2 para. 7(2)(a)
F3Word in Sch. 4A para. 7(5)(a) repealed (with effect in accordance with Sch. 12 para. 5(2) of the amending Act) by Finance Act 2006 (c. 25), Sch. 12 para. 5(1)(a), Sch. 26 Pt. 3(15)
F4Words in Sch. 4A para. 7(5)(b) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 125(a)
F5Words in Sch. 4A para. 7(5)(b) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 125(b)
F6Sch. 4A para. 7(5)(c) and preceding word inserted (with effect in accordance with Sch. 12 para. 5(2) of the amending Act) by Finance Act 2006 (c. 25), Sch. 12 para. 5(1)(b)
F7Words in Sch. 4A para. 7(5)(c) substituted (with effect in accordance with Sch. 2 para. 22 of the amending Act) by Finance Act 2008 (c. 9), Sch. 2 para. 7(2)(b)