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

Meaning of "available protected income" in section 643A

Section 643C defines how to calculate the amount of "available protected income" for a settlement in relation to a particular individual and tax year, for the purposes of the settlements income charge under section 643A.

• Available protected income is calculated using a five-step process: start with total protected foreign-source income and transitional trust income that has arisen under the settlement, then make deductions and additions
• Deductions are made for amounts already matched under the transfer of assets abroad rules, amounts on which income tax has already been paid, and amounts already treated as deemed income under section 643A in earlier years
• An addition is made to restore any amounts previously treated as deemed income that were subsequently identified as qualifying foreign income on a foreign income claim
• When identifying total protected income at Step 1, foreign income is treated as arising under the settlement when it arises, not only when it is remitted to the UK