Part 5Miscellaneous income
Chapter 5Settlements: amounts treated as income of settlor F1or family
Capital sums treated as income of settlor: trustees' payments
633Capital sums paid to settlor by trustees of settlement
1
Any capital sum paid directly or indirectly in any tax year by the trustees of a settlement to the settlor is treated for income tax purposes as follows.
2
The sum is treated as the income of the settlor for the tax year so far as the amount of the sum falls within the amount of income available up to the end of the year.
3
The sum is treated as the income of the settlor for the following year so far as the amount of the sum—
a
is not treated under subsection (2) as the settlor's income for the tax year in which it is paid, and
b
falls within the amount of the income available up to the end of the following year.
4
Subsection (3) also applies for each subsequent year up to a maximum of 10 years subsequent to the tax year in which the sum is paid.
5
For this purpose the reference in subsection (3)(a) to being treated under subsection (2) as the settlor's income for the tax year in which the capital sum is paid is a reference to being treated under subsection (2) or (3) as the settlor's income for that year and any other year before the subsequent year in question.
6
For the meaning of certain expressions used in this section, see—
section 634 (meaning of “capital sum” and “sums paid to settlor”),
section 635 (amount of available income),
section 636 (calculation of undistributed income), and
section 637 (qualifications to section 636).
7
For other provisions, see—
section 638 (capital sums paid by way of loan or repayment of loan),
section 639 (loans to participators in close companies), and
section 640 (grossing-up of deemed income).
Words in Pt. 5 Ch. 5 heading inserted (with effect in accordance with Sch. 10 para. 21 of the amending Act) by Finance Act 2018 (c. 3), Sch. 10 para. 3(2)