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General principles

A settlement includes any disposition, trust, covenant, arrangement or transfer of assets¹. This includes a simple gift without any deed. Settlement may include a series of transactions which taken together are regarded as an arrangement. An arrangement can include associated transactions, only some of which may be expressed in a deed. It can include a single transaction or a series of associated transactions where there is no formal deed at all. However, the scope of a settlement is limited to arrangements where there is an element of bounty.

In determining whether or not there is a settlement falling within these provisions, HMRC considers any series of transactions globally. These transactions could ultimately lead to a transfer of income, or of assets upon which income arises, from a settlor who may or may not be named or identified in the deed or other documents. The assets could go to another person or persons who enjoy that income or receive that income in a fiduciary capacity for the enjoyment of others, either