Alan Pink looks at some practical issues and limits of the ‘settlements’ provisions.
The ‘settlements’ income tax anti-avoidance rules are found in ITTOIA 2005. The principal sets of rules are respectively the ‘revocable, or settlor interested’ settlement rules (ITTOIA 2005, s 624), and the ‘settlements on minors’ rules (s 629).
For the purpose of these rules, the term ‘settlement’ is a lot wider than the concept of a formal trust, drawn up by a solicitor, and signed and sealed; under ITTOIA 2005, s 620 it can include, for example, any kind of ‘arrangement’.
The rules referred to here as the ‘revocable, or settlor interested’ rules apply where the person who has made the settlement or arrangement is in a position to take the money or asset back. The second
