Income Tax Act 2007 section 470

Transfers between settlements

Section 470 sets out the conditions under which special rules apply to identify the settlor when property is transferred from the trustees of one settlement to the trustees of another settlement.

• When property moves between two settlements and the transfer is not for full consideration or not at arm's length, special settlor-identification rules under section 471 are triggered.
• Certain transfers are excluded: those arising solely from a beneficiary assigning their interest, those resulting solely from the exercise of a general power of appointment, and those caught by the variation-of-will provisions in section 473(4).
• A "transfer of property" means a disposal by the trustees of the first settlement combined with the acquisition by the trustees of the second settlement of either that same property or new property created by the disposal.
• Whether an acquisition or disposal has taken place is determined by reference to the capital gains tax rules in the Taxation of Chargeable Gains Act 1992.

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