ICTA was enacted in order to consolidate a number of earlier legislative provisions covering taxation.

This is a body of law which seeks to prevent someone (known as the "settlor") from avoiding tax by reclassifying income as belonging to someone else (known as the beneficiary).

The income is then taxed at the beneficiary's lower rate although the settlor continues to benefit from it.

The legislation targets spouses and also parents seeking to divert income via their minor children.

In 2007 the interpretation was finally rejected by the Law Lords,[3] resulting in the government proposing new legalisation to tackle the perceived abuse.