Settlement legislation: settlor retains an interest - exceptions - gifts to charities
The rule that where the settlor has retained an interest in property in a settlement the income arising is treated as the settlor’s income for all tax purposes (TSEM4200) does not apply to qualifying income which arises under a UK settlement if
- it is given by the trustees to a charity in the tax year in which it arises, or
- it is income to which a charity is entitled under the terms of the trust.
‘Qualifying income’ is defined in the legislation.
A’UK settlement’ is one the trustees of which are resident and ordinarily resident in the UK.