Income Tax Act 2007 section 735AA

Settlements to which following sections apply

Section 735AA identifies which settlement arrangements fall within the scope of the special rules in sections 735AB to 735C, which deal with protected foreign-source income and transitionally protected income arising from transfers of assets abroad before 6 April 2025.

• The rules apply where a relevant transfer of assets abroad occurred before 6 April 2025 and the overseas person was either the trustees of a settlement or a company in which those trustees were participators or indirect participators.
• Protected foreign-source income or transitionally protected income must have arisen in connection with that transfer for the provisions to bite.
• Key defined terms — "the relevant transfer", "the settlement", and "the settlor" — carry through into sections 735AB to 735C and refer back to the specific transfer and settlement identified under this section.
• Trustees are treated as "indirect participators" in a company if they hold a participation interest through a chain of companies leading ultimately to the overseas person.

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