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

Section 643F(4): benefits and income "relating" to deemed income

Section 643G provides ordering and matching rules that determine how benefits received by an individual from a settlement, and the settlement's protected foreign-source income, are linked to the deemed income that arises under the settlements code for individuals who use the remittance basis.

• Benefits received by the individual are listed in chronological order and reduced by any deductions already allowed, then matched against deemed income and protected income using a strict ordering process.
• Protected income (foreign-source income of the settlement that has not been taxed in the UK) is also listed chronologically and reduced where it has already been used to charge tax under the transfer of assets abroad rules or has been treated as income of other individuals under the settlements code.
• The deemed income arising under section 643A is placed in the order it arose and is then matched simultaneously against both the ordered benefits and the ordered protected income, linking all three together.
• For the purpose of determining whether protected income has already been taken into account under the transfer of assets abroad rules, the matching is done by reference to notional income arising under section 732 of ITA 2007, using the matching mechanism in section 735A of ITA 2007.

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