Lee Sharpe looks at one of HMRC’s key weapons to combat income transfers between couples and other family members.
This is the first of a series of articles that will look at the so-called ‘settlements’ regime – the settlements anti-avoidance legislation (at ITTOIA 2005, Pt 5, Ch 5; starting at section 619) – and how it applies; also, how to avoid it in the various scenarios that a property owner is likely to encounter.
It should be noted that, just like the phrase ‘tax avoidance’, the word ‘settlement’ can mean different things to different people – and this is generally okay, right up to the point where it is not. Without wishing to offend lawyers, ‘settlement’ is often used interchangeably with ‘trust’, to describe when the original owner transfers one or more assets to a custodian to look after for someone else’s benefit. Or, in more