Income Tax Act 2007 section 641

Small holdings: trustees of a disabled person's trusts

Section 641 provides an exclusion from the accrued income scheme for trustees of a disabled person's trust where the nominal value of their securities holdings does not exceed £5,000.

• Trustees of a disabled person's trust are excluded from the accrued income scheme unless the nominal value of their securities exceeds £5,000 on any day in the relevant tax year or the previous tax year
• The £5,000 threshold applies equally to transfers with accrued interest, transfers without accrued interest, transfers with unrealised interest, and transfers of variable rate securities
• The specific tax year tested depends on the type of transfer: the year in which the interest period ends, the year in which the settlement day falls, or the relevant tax year for variable rate securities
• A disabled person's trust is one falling within paragraph 3 of Schedule 1C to the Taxation of Chargeable Gains Act 1992, broadly covering trusts where the beneficiary is incapacitated to a degree that interferes with their management of their own affairs