A fairly specific one here:
For the purposes of Pt 5, and specifically settlor-interested settlements, “settlement” includes any disposition, trust, covenant, agreement, arrangement or transfer of assets. HMRC take the view this can include a partnership (opinions differ).
Does anybody know if the exception for payments to charity under s.628 can apply to any “settlement” in the wider defined sense or only a trust? It opens using the term “UK settlement” but then refers to “trustees” and “the terms of the trust”. Unhelpfully, a “UK settlement” means “a settlement the trustees of which are resident in the UK”. A charity could similarly be entitled to income under the terms of a partnership.
Is this just poor drafting, and the terms “trust” and “trustees” could be interpreted more widely or did Parliament really intend to limit the exception to actual trusts?
The relevant section reads:
"(1) The rule in section 624(1) does not apply to any qualifying income which arises under a [UK settlement] if—
(a) it is given by the trustees to a charity in the tax year in which it arises, or
(b) it is income to which a charity is entitled under the terms of the trust."
Thank you to anybody who made it this far!
EDIT TO ADD - confusingly, the phrase “UK settlement” was originally “UK trust” but was switched in 2006. The same change was made to the (virtually identical) s.630(1) but there, “terms of the trust” was also updated to “terms of the settlement”.