Income Tax (Trading and Other Income) Act 2005 section 620

Meaning of "settlement" and "settlor"

Section 620 defines the key terms "settlement" and "settlor" for the purposes of the settlements income rules in this chapter.

• A "settlement" is defined very broadly to include any disposition, trust, covenant, agreement, arrangement or transfer of assets, but excludes charitable loan arrangements
• A "settlor" is any person who has made a settlement, whether directly or indirectly, including by providing or undertaking to provide funds for it, or by making a reciprocal arrangement with someone else
• The rules apply to settlements wherever they are made, with no geographical limitation
• A "charitable loan arrangement" — which is excluded from the definition of settlement — is a loan of money by an individual to a charity made either for no consideration or for consideration consisting only of interest