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HMRC internal manual

Trusts, Settlements and Estates Manual

Tax Cases: CIR v Plummer 54 TC 1

Summary

In a tax avoidance scheme an individual received a lump sum and in exchange made covenanted payments. He claimed a deduction for the payments in computing his total income.

Decision

The covenanted payments were income payments and the Settlements legislation did not apply to the arrangement. This is because the individual had received full consideration and there was no element of bounty.

TSEM references

TSEM4105