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HMRC internal manual

Trusts, Settlements and Estates Manual

Non-resident trusts: settlor’s chargeability: income tax - minor unmarried child

Where trustees make an income or capital payment to a (relevant) child of the settlor, the payment can be treated as that of the settlor for all tax purposes (TSEM4300).

Where the payment is made from income, because the provisions of ITA/S493 do not apply to non-resident trusts, there is no grossing up and no tax credit. The payment is regarded as untaxed foreign income (TSEM10255) and should be taken into account by the settlor when considering his or her liability to income tax for the year - but see TSEM10320 regarding the operation of ESC A93.