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

Cases where settlor liable following onward gift

Section 643L makes the settlor liable to income tax on onward payments made to close family members who are either non-UK resident or UK resident remittance basis users, where those payments would otherwise escape UK tax.

• Where an onward payment caught by section 643I is made to a close family member of the settlor who is a UK resident remittance basis user, any unremitted part of the payment is treated as income of the settlor for income tax purposes
• Where the close family member receiving the onward payment is not UK resident for the tax year, the entire onward payment is treated as income of the settlor
• The settlor must themselves be UK resident at some point in the tax year but must not be UK domiciled, and must not be deemed domiciled solely by meeting Condition A in section 835BA of ITA 2007
• Where tax becomes chargeable on the settlor under this section, the settlor may recover the amount from the recipient and may require HMRC to issue a certificate confirming the income and tax involved, which serves as conclusive evidence of the facts it states