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Where the total of the relevant settlement income of a child from settlements of one parent does not exceed £100 in any tax year, the legislation does not apply in that year.

Example 18 - income less than £100 is not within ITTOIA/S629

A father makes regular gifts of cash to his two daughters aged 13 and 15 who deposit the money in building society accounts in their own names. »Ê¹ÚÌåÓýapp income arising to the children is £50 and £105 respectively and they have no other income. As the £50 income is less than £100, we would not treat it as the father’s income. However, for the daughter whose interest was £105, we would treat all the income as that of her father.

Example 19 - £100 limit applies separately to each parent

A father makes regular gifts of cash to his 14-year-old son who deposits the money in a building society account. »Ê¹ÚÌåÓýapp child’s mother gives her son a holding of shares in the family company. »Ê¹ÚÌåÓýapp child has no other income.

In one year, the building society interest is £80 and the dividends received are £120. »Ê¹ÚÌåÓýapp building society interest is less than £100 so we would not treat the income as that of his father. However, as the dividends exceed £100, we would treat the whole of the dividends as the income of his mother.

If one parent had made all the gifts, the full £200 would be treated as that parent’s income.