Taxation of Chargeable Gains Act 1992 Schedule 5 paragraph 9

Qualifying settlements, and commencement

Section 86 Schedule 5 paragraph 9 determines when a settlement qualifies for the attribution of gains to settlors with an interest in non-resident or dual-resident settlements, and sets out the conditions and commencement rules that apply.

• Any settlement created on or after 19 March 1991 automatically qualifies from the year it was created onwards; settlements created before that date qualify from 1999-00 onwards, but only if one of five specified conditions is met.
• The five conditions cover situations such as new property being added to the settlement on non-arm's length terms, trustees ceasing UK residence or becoming treaty-resident abroad, the settlement terms being varied to benefit connected persons, connected persons actually receiving a benefit, or the settlement losing its protected status.
• A settlement is "protected" if its beneficiaries are limited to minor children of a settlor, unborn children, future spouses or civil partners, and persons who fall outside the defined categories of connected persons — effectively shielding it from qualifying settlement status until a triggering event occurs.
• Connected persons for these purposes include the settlor, their spouse or civil partner, children, grandchildren, their respective spouses or civil partners, and companies controlled by or associated with any of those individuals.