Beckingtons
01904 690188
This email address is being protected from spambots. You need JavaScript enabled to view it.

Search News


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.



 

Latest News

Tax Diary May/June 2018
18/04/2018 - More...
1 May 2018 - Due date for corporation tax due for the year ended 30 July 2017. 19 May 2018 - PAYE and NIC deductions

Renewing tax credit claims
17/04/2018 - More...
Families and individuals that receive tax credits should ensure that they renew their tax credit claims by 31 July 2018.

How much does Class 4 NIC cost?
17/04/2018 - More...
There are currently two types of national insurance contributions (NICs) payable by most self-employed people. These are

Newsletter

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

» Sign up for the newsletter
» Login

 

 

Copyright © 2018 - Beckingtons Limited | Beckingtons Limited | Registered in England & Wales | Registered No. 4671864 | Registered Office 2 Clifton Moor Business Village, James Nicolson Link, York, YO30 4XG | VAT Registration No. 721561752

Cookie Policy