SCHEDULES

SCHEDULE 10Settlements: anti-avoidance etc

PART 2Income tax

ITTOIA 2005

10

In section 637 (qualifications to section 636)—

a

in subsections (2), (3) and (4) (extent to which interest treated as deductible trust expenses), before “interest” insert “ relevant ”,

b

in subsection (5) (the relevant fraction), in the definition of “A”, before “income” insert “ unprotected ”, and

c

after subsection (7) insert—

7A

In this section “relevant interest” means interest which, in the absence of any express provision of the settlement, would be properly chargeable to unprotected income.