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HMRC internal manual

Trusts, Settlements and Estates Manual

Non-resident trusts: settlor’s chargeability: Income Tax - capital sums paid to settlor

If capital sums are paid to the settlor or to his or her spouse or civil partner by the trustees of a non-resident trust, you need to consider:

  • the application of the settlements legislation ITTOIA/Ss633 and 641(TSEM4400 toTSEM4405) - where the settlor may be charged to tax on income of the trust that has not already been treated as his or her income under ITTOIA/Ss624 and 629;
  • the application of the Transfer of Assets Abroad legislation ITA/S727 (INTM600020 - external users can find this guidance at - where income payable to a person abroad (which includes trustees of a non-resident trust and any non-resident company underlying a trust) may be chargeable to tax on the settlor;
  • the application of the Capital Gains Tax anti-avoidance legislation TCGA/S87 (CG38210 - external users can find this guidance at - where capital gains of the non-resident trust have not been charged to Capital Gains Tax on the trustees (TSEM10265), and the same gains have not already been attributed to the settlor under TCGA/S86, then they may be attributed to the settlor as a result of the payment of the capital sum. In this case the settlor is also considered to be a ‘beneficiary’ of the trust.

A non-resident trust may give details of such capital sums on, for example, completed Tax Returns or form 50FS (TSEM10130).