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ITTOIA/S623 allows the settlor ‘the same deductions and reliefs� the settlor would have been entitled to had the settlor actually received the income. Thus reliefs which can only be set against a particular type of income, such as a credit under a DTA for foreign tax suffered by the trustees on foreign source income, is available to the settlor even though the charge on the settlor is under ITTOIA/Part 5 (‘Miscellaneous Income�).

Where the ‘income arising under a settlement� is a net amount computed in accordance with the statutory rules (such as the profits of a trade or property business), ITTOIA/S623 does not allow losses made by the trustees to be used by the settlor. So, if the trustees make a loss from a property business the ‘income arising under a settlement� is zero and there is nothing to attribute to the settlor - any losses remain at the trustee level. If no income has been attributed there can be no reliefs.