Income Tax (Trading and Other Income) Act 2005 section 134

Amounts treated as income of settlor: capital sums paid to settlor by trustees of settlement

Section 134 provides transitional rules for calculating the available income of a settlement when capital sums are paid to a settlor, specifically where pre-1995-96 tax years are involved, and modifies certain definitions for sums paid or directions given before particular dates.

• Where pre-1995-96 tax years are involved, the calculation of available income under section 635 is modified to reference the former ICTA provisions that applied in those earlier years
• Undistributed settlement income already treated as the settlor's under various former ICTA sections (such as sections 671–683) must be excluded from the available income calculation for those earlier years
• For any sum paid before 6 April 1995, the definition of when a capital sum is treated as paid to a settlor is modified to refer to events specified in the former section 673(3) of ICTA
• The rule treating a direction or assignment to pay as equivalent to an actual payment does not apply if the direction or assignment was given or made before 6 April 1981

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