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HMRC internal manual

Trusts, Settlements and Estates Manual

Settlements legislation: introduction to the settlements legislation

This chapter gives details of the provisions that are in place to stop settlements, etc being used to gain tax advantages.

The settlements legislation was originally enacted in the 1930s. The legislation, which is now contained within ITTOIA/ Chapter 5 Part 5 applies from 2005-2006 onwards. This is a rewrite of what was previously in ICTA88/Part XV, Chapter 1A and 1B (sections 660A to 660G, 677, 678 and 682A). The legislation applies not only to trusts but can also apply to other situations involving individuals, companies and partnerships. The guidance in this chapter refers to ITTOIA but in substance applies equally to the previous legislation enacted in 1995, which applied to the years 1995-1996 to 2004-2005. Where you are dealing with income arising under a settlement for tax years up to 5 April 2005 you will need to use the ICTA 1988 legislation. A table of the ICTA origins of the ITTOIA sections can be found at TSEM4003. If you need guidance on the application of the legislation for years before 1995-1996, contact HMRC Trusts & Estates Technical Edinburgh.