Tel: 01736 795753
This email address is being protected from spambots. You need JavaScript enabled to view it.

What is the settlement legislation?

Source: HM Revenue & Customs | | 03/04/2018

The settlements legislation is contained in s.624 ITTOIA 2005. The legislation seeks to ensure that where a settlor has retained an interest in property, in a settlement, that the income arising is treated as the settlor’s income for tax purposes. A settlor can be said to have retained an interest if the property or income may be applied for the benefit of the settlor, a spouse or civil partner.

In general, the settlements legislation can apply where an individual enters into an arrangement to divert income to someone else and in the process, tax is saved.

These arrangements must be:

  • bounteous, or
  • not commercial, or
  • not at arm’s length, or
  • in the case of a gift between spouses or civil partners, wholly or substantially a right to income.

Planning note

However, there are a number of everyday scenarios where the settlements legislation does not apply. In fact, after much case law in this area, HMRC has confirmed that if there is no 'bounty' or if the gift to a spouse or civil partner is an outright gift which is not wholly, or substantially, a right to income, then the legislation will not apply.



Search Archive


Latest News

Could you claim expenses and an early tax refund?
04/12/2018 - More...
HMRC is reminding employees that they may be able to claim a tax rebate if they have incurred

X-factor VAT bonus
04/12/2018 - More...
The Chancellor, Philip Hammond has announced that the government will waive the VAT equivalent on

Employing someone to work in your home
04/12/2018 - More...
When you employ someone to work in your home, it is your responsibility to ensure you meet the

Search

Our Address

Greenwood Wilson
The Old School
The Stennack
St Ives
Cornwall
TR26 1QU

Contact Us

tel: 01736 795753
fax: 01736 798642
This email address is being protected from spambots. You need JavaScript enabled to view it.

Newsletter

With our newsletter, you automatically receive our latest news by e-mail and get access to the archive including advanced search options!

» Sign up for the Newsletter
» Login