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HMRC internal manual

Trusts, Settlements and Estates Manual

From
HM Revenue & Customs
Updated
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Non-resident trusts: settlor’s chargeability: income tax - amount of charge

If the settlements legislation at ITTOIA/S624 or S629 applies, the amount of income arising under the settlement which is chargeable to income tax on the settlor will depend on:

for the tax year (ITTOIA/S648).

For example, where income of the trust is ‘foreign income’, then -

  1. if the settlor is not resident in the UK, foreign income of the trust is not treated as that of the settlor;
  2. if the settlor is resident and not domiciled in the UK, and not a remittance basis user, foreign income of the trust is treated as that of the settlor;
  3. if the settlor is resident and not domiciled in the UK and a remittance basis user, foreign income of the trust is only treated as that of the settlor when remitted to the UK.

The settlor is chargeable to income tax at his or her appropriate rate/s of tax. If tax has been paid by the trustees on income chargeable on the settlor, see TSEM4512.

Where a capital sum is paid to the settlor, see TSEM10335.