Income Tax (Trading and Other Income) Act 2005 section 643B

Meaning of "untaxed benefits total" in section 643A

Section 643B defines the "untaxed benefits total" for a settlement, which is the key figure used under section 643A to determine whether and how much income is deemed to arise to a settlor or close family member who receives benefits from a trust.

• The untaxed benefits total is calculated by adding up all benefits provided by trustees to the individual in the current and earlier UK-resident tax years, then deducting amounts already subject to income tax, capital gains tax, or previously treated as arising under sections 643A, 643J or 643L.
• Where a benefit is provided to a close family member of the settlor who is non-UK resident or a qualifying new resident, and the settlor is UK resident, the benefit is redirected and treated as having been provided to the settlor instead.
• A benefit provided by trustees includes anything funded directly or indirectly from the settlement's property or income, and where pre-distribution income belongs to someone other than the trustees, that income (net of trustees' expenses) is treated as a benefit provided to that person at the time the income arises.
• The valuation rules in sections 742C to 742E of ITA 2007 — covering benefits such as loans and the use of land — apply when calculating the value of benefits for the purposes of this section.