Section 734 | Payments from trusts for injured persons

(1)No liability to income tax arises for the persons specified in subsection (2) in respect of sums paid under a lifetime trust—

(a)to the person (“A”) who is entitled to—

(i)a payment under an order, agreement or undertaking within section 731(2) or an annuity purchased or provided as mentioned in section 731(3), or

(ii)compensation under an award within section 732(1), or

(b)for the benefit of A.

(2)The persons are—

(a)A, and

(b)if subsection (1)(b) applies, a person who receives the sum on behalf of A.

(3)For the purposes of subsection (1), sums are paid under a lifetime trust if they are paid—

(a)by the trustees of a trust under which A is, while alive, the only person who may benefit, and

(b)out of payments within section 731(2) or (3) or 732(1) which are received by them on trust for A.