Section 476 How to work out whether settlor meets condition C

United Kingdom

(1)

This section applies for the purpose of working out whether a settlor (“S”) in relation to a settlement meets condition C at a time.

(2)

If—

(a)

the settlement arose on S's death (whether by S's will, on S's intestacy or in any other way), and

(b)

immediately before S's death, S was UK resident F1... F2...,

then S meets condition C from the time of S's death until S ceases to be a settlor in relation to the settlement.

(3)

If—

(a)

the settlement is not within subsection (2)(a), and

(b)

at a time when S made the settlement (or is treated for the purposes of the Income Tax Acts as making the settlement), S was UK resident F3... F4...,

then S meets condition C from that time until S ceases to be a settlor in relation to the settlement.

F5(3ZA)

In relation to a settlement—

(a)

that arose before 6 April 2025 on S’s death, or

(b)

that S made (or is treated for the purposes of the Income Tax Acts as having made) before 6 April 2025,

subsections (2)(b) and (3)(b) have effect as if after “UK resident” there were inserted “or domiciled in the United Kingdom”.

F6(3A)

Section 835BA (deemed domicile) applies for the purposes of F7subsection (3ZA).

(4)

Further, if—

(a)

there is a transfer of property in relation to which section 471 applies,

(b)

S is a settlor in relation to settlement 2 as a result of that section, and

(c)

immediately before the disposal by the trustees of settlement 1, S meets condition C as a settlor in relation to settlement 1 as a result of F8this section,

then S meets condition C as a settlor in relation to settlement 2 from the time S becomes such a settlor until S ceases to be such a settlor.

(5)

“Settlement 1” and “settlement 2” are to be read in accordance with section 470(1).

Annotations

Textual amendments

F1: Words in s. 476(2)(b) omitted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 46 para. 57(2) (with Sch. 46 para. 57(4))
F2: Words in s. 476(2)(b) omitted (for the tax year 2025-26 and subsequent tax years) by virtue of Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 11(2)
F3: Words in s. 476(3)(b) omitted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 46 para. 57(3) (with Sch. 46 para. 57(5))
F4: Words in s. 476(3)(b) omitted (for the tax year 2025-26 and subsequent tax years) by virtue of Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 11(2)
F5: S. 476(3ZA) inserted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 11(3)
F6: S. 476(3A) inserted (with effect in accordance with Sch. 8 para. 12(2) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 8 para. 12(1)
F7: Words in s. 476(3A) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 11(4)
F8: Words in s. 476(4)(c) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 11(5)

Notes on Chapter 2

Modifications

C1: Pt. 9 Ch. 2 applied (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 1169(1), 1184(1) (with Sch. 2)