Income Tax (Trading and Other Income) Act 2005 section 648

Income arising under a settlement

Section 648 defines what counts as "income arising under a settlement" for the purposes of the settlements legislation, including how foreign income and the remittance basis interact with these rules.

• Income arising under a settlement includes any income chargeable to income tax, and any income that would have been chargeable if received in the United Kingdom by a UK resident person
• Where the settlor is not UK resident in a tax year, income from the settlement is excluded if the settlor would not have been chargeable to income tax on that income due to their non-resident status
• For the tax year 2024-25 and earlier years, where the remittance basis applied to the settlor, only specified foreign income that is actually remitted to the United Kingdom is treated as income arising under the settlement
• Any such remitted income is treated as arising under the settlement in the tax year in which it is actually remitted to the United Kingdom, not the year in which it originally arose