Commentary

I5.1228 Qualifying and protected settlements

IHT, trusts and estates

I5.1228 Qualifying and protected settlements

I5.1228 Qualifying and protected settlements

Qualifying settlements

The rules that attribute the gains of non-resident settlements to the settlor (see I5.1225) only apply to 'qualifying' settlements1.

From 6 April 2009 all non-resident settlements are qualifying settlements unless they are 'protected' settlements2 (see below).

A settlement is a qualifying settlement if the settlor has an interest in the settlement (see I5.1226), ie the trust property originated from him (see I5.1227) and is, or potentially can be, applied for the benefit of a 'defined person' either directly or indirectly.

The definition of a 'defined person' here is the same used for determining whether a settlor has an interest in the settlement (see I5.1226), and includes3:

  1.  

    •     the settlor

  2.  

    •     the settlor's spouse or civil partner

  3.  

    •     any child (of any age) of the settlor or the settlor's spouse or civil partner

  4.  

    •     any spouse or civil partner of any such child

  5.  

    •     any grandchild (of any age) of the settlor or the settlor's spouse or civil partner

  6.  

    •     the spouse or civil partner of any such grandchild, or

  7.  

    •     a company controlled by any of the above, or a company associated with such a

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