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HMRC internal manual

Trusts, Settlements and Estates Manual

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HM Revenue & Customs
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Settlements legislation: settlement for unmarried minor child: income less than £100

Where the total of the relevant settlement income of a child from settlements of one parent does not exceed £100 in any tax year, the legislation does not apply in that year.

Example 18 - income less than £100 is not within ITTOIA/S629

A father makes regular gifts of cash to his two daughters aged 13 and 15 who deposit the money in building society accounts in their own names. The income arising to the children is £50 and £105 respectively and they have no other income. As the £50 income is less than £100, we would not treat it as the father’s income. However, for the daughter whose interest was £105, we would treat all the income as that of her father.

Example 19 - £100 limit applies separately to each parent

A father makes regular gifts of cash to his 14-year-old son who deposits the money in a building society account. The child’s mother gives her son a holding of shares in the family company. The child has no other income.

In one year, the building society interest is £80 and the dividends received are £120. The building society interest is less than £100 so we would not treat the income as that of his father. However, as the dividends exceed £100, we would treat the whole of the dividends as the income of his mother.

If one parent had made all the gifts, the full £200 would be treated as that parent’s income.