Trustees of a revocable life interest trust, set up under the late mother’s Will, revoke the life interest of father, after which the income is held on discretionary trusts. The son is 16. If income is advanced to the son, or he is given a life interest, is this income taxed against the father? I do not believe so, although he is the settlor for IHT purposes, but what is the authority for this, or am I wrong?
I believe it is simply that father is not the settlor for income tax purposes - he does not come within either of the definitions but particularly not s.620 ITTOIA, which governs attribution to the settlor.
Osborne Clarke LLP
A settlor may encompass a beneficiary who releases an interest under a settlement. Whether this also applies to such a beneficiary who merely consents to the release seems less clear.
In my case no consent is required.