Part III Individuals, partnerships, trusts and collective investment schemes F4etc

Annotations:
Amendments (Textual)
F4

Word in Pt. 3 heading inserted (with effect in accordance with Sch. 22 para. 12 of the amending Act) by Finance Act 2009 (c. 10), Sch. 22 para. 9; S.I. 2010/670, art. 2

Chapter II Settlements

Migration of settlements, non-resident settlements and dual resident settlements

C386 Attribution of gains to settlors with interest in non-resident or dual resident settlements.

1

This section applies where the following conditions are fulfilled as regards a settlement in a particular year of assessment—

a

the settlement is a qualifying settlement in the year;

b

the trustees of the settlement fulfil the condition as to residence specified in subsection (2) below;

c

a person who is a settlor in relation to the settlement (“the settlor”) is domiciled in the United Kingdom at some time in the year and is F5resident in the United Kingdom for the year;

d

at any time during the year the settlor has an interest in the settlement;

C1C2e

by virtue of disposals of any of the settled property originating from the settlor, there is an amount on which the trustees would be chargeable to tax for the year under F11section 1(3)F3if the assumption as to residence specified in subsection (3) below were made;

f

paragraph 3, 4 or 5 of Schedule 5 does not prevent this section applying.

F62

The condition as to residence is that—

a

there is no time in the year when the trustees are resident in the United Kingdom, or

b

there is such a time but, whenever the trustees are resident in the United Kingdom during the year, they fall to be regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom.

3

Where subsection (2)(a) above applies, the assumption as to residence is that the trustees are F2resident F7... in the United Kingdom throughout the year; and where subsection (2)(b) above applies, the assumption as to residence is that the double taxation relief arrangements do not apply.

F103A

Section 835BA of ITA 2007 (deemed domicile) applies for the purposes of subsection (1)(c).

4

Where this section applies—

a

chargeable gains of an amount equal to that referred to in subsection (1)(e) above shall be treated as accruing to the settlor in the year F8or if, as respects the settlor, the year is a split year, in the UK part of that year, and

b

those gains shall be treated as forming the highest part of the amount on which he is chargeable to capital gains tax for the year.

F124ZA

Where (apart from this subsection) the amount mentioned in subsection (1)(e) would include a chargeable gain or allowable loss to which section 1A(3)(b) or (c) applies (disposals by non-UK residents within the charge to capital gains tax), so much of the gain or loss as would be so included is to be disregarded for the purposes of subsection (1)(e).

F94ZB

Where (apart from this subsection) the amount mentioned in subsection (1)(e) would include an amount of chargeable gains treated as accruing under section 103KA(2) or (3) (carried interest gains), the amount of the gains is to be disregarded for the purposes of subsection (1)(e).

F14A

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5

Schedule 5 (which contains provisions supplementary to this section) shall have effect.