SCHEDULES

SCHEDULE 13Settlements: amendments to ICTA and ITTOIA 2005 etc

Part 2Minor and consequential amendments

7

Paragraphs 8 to 26 amend ICTA.

8

Section 220(2) shall cease to have effect.

F119

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F1210

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11

F1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1312

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F1413

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14

F2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15

F3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16

F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17

F5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1518

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19

F6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1620

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21

F7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22

F8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23

Section 764 shall cease to have effect.

F1724

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F1825

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F1926

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27

1

Paragraph 7 and paragraphs 9 to 26 shall come into force on 6th April 2006 (in relation to settlements whenever created).

2

Paragraph 8 shall come into force on 6th April 2007 (in relation to settlements whenever created).

I128

1

FA 1989 shall be amended as follows.

2

The following provisions shall cease to have effect—

a

section 68(2)(c),

b

section 71(4)(c), and

c

section 110.

3

In section 68(2)—

a

after paragraph (ba) insert “ , and ”, and

b

after paragraph (bb) omit “, and”.

4

In section 71(4)—

a

after paragraph (ba) insert “ , and ”, and

b

after paragraph (bb) omit “, and”.

5

Sub-paragraph (2)(a) and (b) shall have effect in relation to payments made on or after 6th April 2006.

6

Sub-paragraph (2)(c) shall have effect from 6th April 2007 (in relation to settlements whenever created).

7

Sub-paragraphs (3) and (4) shall come into force on 6th April 2006.

Annotations:
Commencement Information
I1

Sch. 13 para. 28 wholly in force; para. 28(3)(4) in force at 6.4.2006 and para. 28 otherwise in force at Royal Assent (para. 28(2)(c) having effect from 6.4.2007) see para. 28(5)-(7)

F2029

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30

1

In section 25(9)(b) of FA 1990—

a

after sub-paragraph (iii) omit “or”, and

b

F9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

This paragraph shall have effect for payments in respect of income made on or after 6th April 2006.

31

1

In ITTOIA 2005—

a

for “trustees of trusts” in each place in sections 417(2) and 420 substitute “ trustees of settlements ”,

b

in section 420(1)(a) and (c) for “trust” substitute “ settlement ”,

c

in the title of section 420 for “trust” substitute “ settlement ”.

2

For section 623 of ITTOIA 2005 (calculation of income) substitute—

623Calculation of income

For the purpose of calculating liability to tax under this Chapter (but for no other purpose), a settlor shall be allowed the same deductions and reliefs as if any amount treated under this Chapter as income of the settlor had actually been received by the settlor.

3

This paragraph shall come into force on 6th April 2006 in respect of settlements whenever created, and in respect of loans or advances whenever made.

32

1

The following provisions of ITTOIA 2005 shall cease to have effect—

a

section 457(4), and

b

section 568(5).

2

In section 457(5) of ITTOIA 2005 for “(2) to (4)” substitute “ (2) and (3) ”.

3

In section 467(7) of that Act for paragraph (b) substitute—

b

at the rate applicable by virtue of section 686A of ICTA (payments treated as income) in any other case.

4

This paragraph shall have effect in relation to payments made on or after 6th April 2006 to the trustees of a settlement (whenever created).

33

1

In sections 628 and 630 of ITTOIA 2005 for “UK trust” in each place substitute “ UK settlement ”.

2

In section 628(6) of that Act for the definition of “UK trust” substitute—

“UK settlement” means a settlement the trustees of which are resident and ordinarily resident in the United Kingdom.

3

In section 630(1)(b) of that Act for “terms of the trust” substitute “ terms of the settlement ”.

4

In section 631(5)(e)(ii) of that Act for “provisions of the trust” substitute “ terms of the settlement ”.

5

This paragraph shall come into force on 6th April 2006.

34

1

After section 629(7) of ITTOIA 2005 insert—

8

Subsection (1) is subject to section 28A of FA 2005.

2

This paragraph shall have effect in relation to payments made on or after 6th April 2004.

35

1

FA 2005 shall be amended as follows.

2

In the following provisions for “trustees” substitute “ the trustees of a settlement ”

a

section 23(1)(a) and (b) (vulnerable persons: introduction),

b

section 24(1) (vulnerable persons: claims),

c

section 25(1)(a) (qualifying trusts: income tax), and

d

section 37(1) (vulnerable person election).

3

In section 25(3)—

a

for “section 660G(1) and (2) of ICTA” substitute “ section 620(1) of ITTOIA 2005 ”, and

b

for “section 660A of that Act” substitute “ sections 624 and 625 of that Act. ”.

4

In section 27(2)(b) (qualifying expenses) for “total income” substitute “ income ”.

5

Section 42(5)(b) shall cease to have effect.

6

In section 43(4) (penalties) for the first reference to “trustees” substitute “ the trustees of a settlement ”.

7

This paragraph shall come into force on 6th April 2006.

36

1

After section 28 of FA 2005 insert—

28ADisapplication of section 629 of ITTOIA 2005

1

In a case where this section applies, section 629(1) of ITTOIA 2005 shall not apply in respect of a payment by the trustees of a settlement to a beneficiary under the settlement.

2

This section applies if in a year of assessment—

a

the trustees make a payment to a vulnerable person,

b

the payment is made out of qualifying trusts income,

c

the vulnerable person is a relevant child (within the meaning given by section 629 of ITTOIA 2005) of a settlor in relation to the settlement, and

d

the trustees have made a successful claim for special income tax treatment under section 25.

2

This paragraph shall have effect in relation to payments made on or after 6th April 2004.

37

F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .