Commentary

I5.1121 Meaning of deemed settlor for income tax

IHT, trusts and estates

I5.1121 Meaning of deemed settlor for income tax

I5.1121 Meaning of deemed settlor for income tax

The basic definition of a settlor, in relation to a settlement, is any person by whom the settlement was made1. A more extended meaning is given by providing that the following persons are deemed to have made a settlement2:

  1.  

    •     a person who has made or entered into the settlement directly or indirectly

  2.  

    •     a person who has provided or undertaken to provide funds directly or indirectly for the purpose of the settlement

  3.  

    •     a person who has made with any other person a reciprocal arrangement for that other person to make or enter into a settlement

It would appear that a person with a prior life interest or other prior interest in a settlement who assigns that interest may be the settlor of another settlement. Also, a person who consents to an advance to a beneficiary (either in accordance with the powers under the

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