Income Tax (Trading and Other Income) Act 2005 section 629

Income paid to relevant children of settlor

Section 629 deals with the circumstances in which income arising under a settlement and paid to, or treated as the income of, a minor unmarried child of the settlor is taxed as the settlor's own income rather than the child's.

• Where settlement income is paid to or for the benefit of a settlor's relevant child (an unmarried minor under 18 not in a civil partnership), or would otherwise be treated as that child's income, it is taxed as the settlor's income alone for that tax year, provided the settlor is alive.
• This rule does not apply where the income is already taxed on the settlor under the retained-interest provisions of section 624, nor does it apply where the total relevant settlement income paid to or treated as income of the child does not exceed £100 in the tax year.
• An exception also exists for gifts to charities under section 630, and further related rules cover retained or accumulated income (section 631) and deemed income connected to offshore income gains (section 632).
• For these purposes, "child" includes a stepchild, "payments" include payments in money's worth, and the overall provision is subject to section 28A of Finance Act 2005.