Commentary

I5.1231 Calculating the settlor charge

IHT, trusts and estates

I5.1231 Calculating the settlor charge

I5.1231 Calculating the settlor charge

Treatment of the attributed gain

Where the necessary conditions in I5.1225 are satisfied, gains regarded as accruing to the trustees (see I5.1230) in a tax year are treated as accruing to the settlor in that year1.

If the tax year is a split year for the settlor the gains are treated as accruing in the UK part of the year.

The attributed gains are reduced by allowable personal losses for the current year and earlier years2, and are deemed to form the highest part of his chargeable gains for the year of assessment concerned3.

The settlor is entitled to recover the tax paid by him in respect of the trust gains from the trustees of the settlement. He may require a certificate from HMRC showing the amount of the gains and the amount of tax paid for the purposes of recovering the tax4 (see below).

Where amounts are attributed to a settlor from more than one settlement, any losses (if they are less than the total attributable gains) are attributed to those gains in proportion to the respective amounts of those gains5.

Temporarily non-resident settlor

Gains that accrue while a taxpayer is not resident for a period of up to five complete tax years are treated as accruing in the year they return to the UK6.

Consequently, where trustees realise gains during a settlor's temporary non-residence, those gains may be attributed to the settlor in the year in which he resumes residence in the UK.

However, trustees may have made capital payments

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