Commentary

I5.1125 Settlor interested trusts—the general rule

IHT, trusts and estates

I5.1125 Settlor interested trusts—the general rule

Settlor interested trusts (income tax)

I5.1125 Settlor interested trusts—the general rule

The general rule is that income arising under a settlement (see I5.1123) during the life of the settlor is treated as income of the settlor (and of no other person) if it arises from property in which the settlor has an interest1. If the settlement is a trust, expenses of the trustees (see I5.1005 and I5.1010) are not used to reduce the income of the settlor2.

The rule is designed to prevent a person passing income, by means of a settlement, to another person who is not liable to

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