TSEM1015 - Introduction to trusts: general definition of ‘settlement’

A ‘settlement’ is, broadly, another name for a trust. But, the word is not generally used in Scotland.

It has a special income tax meaning - see TSEM1020. For capital gains tax purposes see CG33110.

The person creating the settlement/trust is the settlor. He may also be beneficiary. When making the trust, he may retain the legal interest. Or he may pass the legal interest to trustees, to hold the property in trust for the beneficiaries. He may name himself as a trustee.

A settlement may be a gift (voluntary settlement) or for valuable consideration.