Section 44 | Trust protections etc: minor amendments and transitional protection

(1)In Chapter 5 of Part 5 of ITTOIA 2005 (settlements), in section 643C (meaning of “available protected income”)—

(a)in subsection (1), in Step 5, after “within” insert “Step 2 or”;

(b)in subsection (3)(b), at the end insert “and not exempt from income tax by virtue of any of sections 737 to 742A of that Act”.

(2)In Chapter 2 of Part 13 of ITA 2007 (transfer of assets abroad), in section 733 (benefits charge: amount of deemed income), in subsection (2B)—

(a)in paragraph (a), for “732(2)” substitute “721, 728 or 732”;

(b)in the words after paragraph (b), omit “under section 731”.

(3)In section 87HA of TCGA 1992 (onward gifts from non-residents or qualifying new residents), in subsections (2) and (3), omit “capital”.

(4)In FA 2025, in Schedule 12 (trust protections), in Part 4 (commencement and transitional provision), after paragraph 70 insert—

70ASettlements: transitional protection where available protected income is increased by this Schedule

(1)This paragraph applies for the purposes of section 643A of ITTOIA 2005 if an individual’s untaxed benefits total in relation to a settlement for the tax year 2024-25 exceeded the available protected income up to the end of that tax year.

(2)In determining under section 643B of that Act the individual’s untaxed benefits total for the tax year 2025-26 or a later tax year, any benefit provided to the individual in the tax year 2024-25 or an earlier tax year is to be disregarded at Step 1 in subsection (1).

(3)In this paragraph “untaxed benefits total” and “available protected income”, in relation to an individual, a settlement and a tax year, are to be construed in accordance with sections 643B and 643C of ITTOIA 2005 (as they have or had effect for the tax year in question).

(5)The amendments made by subsection (1) come into force on 6 April 2026.

(6)The amendments made by subsections (2) to (4) are treated as having come into force on 6 April 2025.