Where, in any tax year1, trustees of a settlement2 make an annual payment ('the discretionary payment') in money or money's worth to a person ('the beneficiary') in the exercise of a discretion (whether a discretion exercisable by the trustees or by any other person), then:
(1) if the trustees are UK resident3 for the tax year; and
(a) if what is paid to the beneficiary is, only because of the payment, income4 of the beneficiary for income tax or corporation tax purposes; or
(b) the payment is treated5 for income tax purposes as the income of a
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