Part III Individuals, partnerships, trusts and collective investment schemes F13etc
Chapter II Settlements
Migration of settlements, non-resident settlements and dual resident settlements
C1C297 Supplementary provisions.
1
a
means any payment which is not chargeable to income tax on the recipient or, in the case of a recipient who is neither resident nor ordinarily resident in the United Kingdom, any payment received otherwise than as income, but
b
does not include a payment under a transaction entered into at arm’s length if it is received on or after 19th March 1991.
2
In subsection (1) above references to a payment include references to the transfer of an asset and the conferring of any other benefit, and to any occasion on which settled property becomes property to which section 60 applies.
3
The fact that the whole or part of a benefit is by virtue of F12section 733 of ITA 2007 treated as the recipient’s income for a year of assessment after that in which it is received—
a
b
shall preclude its being treated for those purposes as a capital payment in relation to that or any later year of assessment.
4
5
For the purposes of F1sections 86A to 90 F7and Schedule 4C a capital payment shall be regarded as received by a beneficiary from the trustees of a settlement if—
a
he receives it from them directly or indirectly, or
b
it is directly or indirectly applied by them in payment of any debt of his or is otherwise paid or applied for his benefit, or
c
it is received by a third person at the beneficiary’s direction.
6
Section 16(3) shall not prevent losses accruing to trustees in a year of assessment for which section 87 of this Act or section 17 of the 1979 Act applied to the settlement from being allowed as a deduction from chargeable gains accruing in any later year (so far as they have not previously been set against gains for the purposes of a computation under either of those sections or otherwise).
7
F117A
In this section, sections 86A to 96 and Schedule 4C “trustee”, in relation to a settlement in relation to which there would be no trustees apart from this subsection, means any person in whom the settled property or its management is for the time being vested (and a person who is treated as a trustee of the settlement by virtue of this subsection shall be treated as a trustee of the settlement for the purposes of section 69).
8
In a case where—
a
at any time on or after 19th March 1991 a capital payment is received from the trustees of a settlement or is treated as so received by virtue of section 96(1),
b
it is received by a person, or treated as received by a person by virtue of section 96(2) to (5),
c
at the time it is received or treated as received, the person is not (apart from this subsection) a beneficiary of the settlement, and
d
subsection (9) or (10) below does not prevent this subsection applying,
9
Subsection (8) above shall not apply where a payment mentioned in paragraph (a) is made in circumstances where it is treated (otherwise than by subsection (8) above) as received by a beneficiary.
10
Subsection (8) above shall not apply so as to treat—
a
the trustees of the settlement referred to in that subsection, or
b
the trustees of any other settlement,
as beneficiaries of the settlement referred to in that subsection.
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