Income Tax Act 2007 section 733E

Cases where settlor liable following onward gift

Section 733E makes the settlor liable to income tax on onward gifts received by close family members who are either non-UK resident or UK resident remittance basis users, where the income would otherwise escape UK taxation.

• Where a close family member of the settlor receives an onward gift and is a UK resident remittance basis user, any unremitted portion of the payment is taxed on the settlor as if it were the settlor's own income
• Where the close family member receiving the onward gift is non-UK resident, the entire onward payment is taxed on the settlor as if it were the settlor's own income
• The amount charged on the settlor is reduced by any amount on which the settlor is already liable to income tax under other provisions, and by any excess over the amount described in the onward gift rules
• The settlor has a statutory right to recover from the family member any tax paid under this provision, and may request a certificate from HMRC as conclusive evidence of the income and tax amounts involved