Paragraph 134: Amounts treated as income of settlor: capital sums paid to settlor by trustees of settlement
3678.This paragraph applies where it is necessary to consider years before 1995-96 in applying the charge under section 633.
3679.Section 677(2) of ICTA excludes from income available to cover capital payments made to a settlor income within the settlement that has already been treated as the settlor’s. Section 677(2) of ICTA is rewritten in section 635. Sub-paragraphs (2) and (3) rewrite the categories in section 677(2) of ICTA that only apply in respect of income arising under a settlement before the tax year 1995-96 but which may still have effect when calculating the income available up to the end of a tax year for the purposes of section 633.
3680.Sub-paragraph (5). This saving may still have application where the direction or assignment precedes by some years the capital payment. (Capital payments are no longer charged after 11 years or 16 years if made through a company associated with the settlement. See sections 633 and 643).
