IHTM04250 - Refund to trustees of Income Tax repayments received by settlor
Where the settlor may still benefit from a trust they have created 바카라 사이트 a 바카라 사이트settlor-interested trust바카라 사이트 바카라 사이트 the trust income is treated as the settlor바카라 사이트s and is liable to Income Tax at their personal rate of tax. But it is collected from the trustees at the trust rate of 45%. Unless the settlor also pays tax on their own income at 45%, the tax paid by the trustees on the trust income will be more than the amount of tax due from the settlor. So, the settlor can make a claim for a repayment of the difference.
The Income Tax (Trading and Other Income Act) 2005 (ITTOIA바카라 사이트05)/S646 has been amended so that with effect from 6 April 2010, the settlor is obliged to pass on any repayment of tax they receive in respect of trust income to the trustees.
As the settlor is under a legal obligation to pass on the repayment to the trustees, the value of the asset 바카라 사이트 the tax repayment 바카라 사이트 is offset by the obligation to the trustees. There is no loss to the settlor바카라 사이트s estate and therefore no transfer of value when the payment to the trustees is made.
There is more background information at TSEM4550 onwards.