Section HC 28 — Income Tax Act 2007: Activities treated as those of settlor

HC 28 Activities treated as those of settlor When this section applies (1) This section applies for the purposes of the trust rules to describe certain activities of a person that result in the person being treated as a settlor. Avoidance (2) A person is treated as a settlor if, in relation to a trust,— (a) they act, refrain from acting, or enter into a transaction or a series of transactions; and (b) what is done or not done has the effect of defeating the intent and application of the trust rules. Shareholders in controlled foreign companies (3) A person is treated as a settlor of a trust if a controlled foreign company (CFC) settles an amount on a trust, and the person has a control interest of 10% or more in the CFC. Shareholders in companies (4) A person is treated as a settlor of a trust if— (a) a company settles an amount on the trust; and (b) the company would have been a CFC at the date of settlement if it had been a foreign company at the time; and (c) the person would be treated as having a control interest of 10% or more in the company, if the company had been a foreign company. Second trusts (5) A person is treated as a settlor of a trust (the sub-trust ) if— (a) they are a settlor of a trust (the head-trust ); and (b) a trustee of the head-trust settles an amount on the subtrust, or makes a distribution to, or on terms of the subtrust. Control over trustee or settlor (6) A person is treated as a settlor of a trust if— (a) they acquire, directly or indirectly, rights or powers in relation to a trustee or a settlor of the trust; and (b) the acquisition has the purpose or effect of enabling them to require the trustee to treat them, or a nominee, as a beneficiary of the trust. Defined in this Act: amount , business , CFC , company , control interest , distribution , foreign company , nominee , settlement , settlor , shareholder , trust rules , trustee , Compare: 2004 No 35 ss HH 1(1)–(4), (8), (10) , OB 1 “ settlor ”