Section 735AG — Income Tax Act 2007: Deduction allowed for previous settlements charge

Deduction allowed for previous settlements charge 735AG 1 This section applies if—

a benefits provided as mentioned in section 732(1)(c) are received in a tax year, and b income is treated under section 643A of ITTOIA 2005 as arising to a person in that or a subsequent tax year by reference (direct or indirect) to the whole or part of any benefits so provided.

2 For any tax year after one in which such income is so treated, the amount of income treated as arising to the individual under section 732(2) in respect of benefits provided as mentioned in section 732(1)(c) as a result of the transfer or operations in question is calculated as follows.

3 The amount is calculated under section 733(1) as if the total untaxed benefits were reduced by the amount of that income.

4 The reference in subsection (1)(b) to income treated as arising under section 643A of ITTOIA 2005 includes, in relation to any of the tax years 2018-19 to 2024-25, a reference to income treated as arising under section 643J or 643L of ITTOIA 2005 (settlements code: old onward gift provisions).

5 In this section “ the total untaxed benefits ” has the same meaning as in section 733(1) (see Step 2).