Income Tax (Trading and Other Income) Act 2005 section 619A

Income treated as highest part of settlor's total income

Section 619A ensures that settlement income attributed to a settlor is treated as the highest part of the settlor's total income, thereby taxed at the settlor's highest marginal rate.

• Applies to income treated as the settlor's under the rules for retained interest settlements (section 624) or payments to the settlor's unmarried minor children (section 629)
• Such income is treated as the top slice of the settlor's total income for tax purposes under the Chapter 5 settlements charge
• This top-slicing treatment means the income is effectively taxed at the settlor's highest marginal income tax rate
• Where other rules also require income to be treated as the highest part of total income, section 1012 of ITA 2007 determines how those competing rules interact