Income Tax (Trading and Other Income) Act 2005 section 628A

Exception for protected foreign-source income

Section 628A provides an exception from the settlements income rules where trust income qualifies as "protected foreign-source income", shielding certain foreign trust income from being taxed on the settlor provided six conditions (A to F) are all met.

• The income must be foreign in nature, derived from settlor-provided property, and the settlor must not have been UK domiciled or deemed domiciled when the settlement was created
• In the relevant tax year, the settlor must not be UK domiciled or deemed domiciled, and the trustees must be non-UK resident
• No property or income may have been added to the settlement by the settlor (or trustees of any connected settlement) at any time in the relevant period when the settlor was UK domiciled or deemed domiciled
• The relevant period runs from 6 April 2017 (or the date the settlement was created, if later) to the end of the tax year in question