Taxes Consolidation Act 1997 section 792

Section 792 provides that where a person makes a disposition of income to or for the benefit of another person, the income generally remains the income of the disponer for income tax purposes, unless the disposition falls within specified exceptions.

• Income transferred by disposition is deemed to remain the income of the disponer unless an exception applies; exceptions cover absolute capital divesting, and covenants of six years or more to a relevant individual (a person aged 65 or over, or permanently incapacitated).
• A deed of covenant is a legally binding written agreement to pay income to a person without receiving consideration in return; it must be properly executed, signed, witnessed, sealed and delivered to the covenantee.
• Where the covenant is to a relevant individual who is not permanently incapacitated, relief is capped at 5% of the disponer's total income; this cap does not apply to covenants to permanently incapacitated individuals or to absolute capital dispositions.
• Where the 5% cap applies and there is more than one covenantee, the income treated as belonging to the covenantees is apportioned between them in proportion to their respective entitlements under the disposition.