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|
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(1) | Such apportionments as are just and reasonable are to be made for the purposes of this |
| |
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(a) | the part of a residuary estate in which an interest within any of the provisions |
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specified in subsection (2) subsists does not wholly correspond with the part in |
| 5 |
which another such interest held successively subsists, or |
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(b) | one of those interests is in the whole of the residuary estate and the other is only |
| |
| |
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section 671 (successive absolute interests), |
| 10 |
section 672 (successive interests: assumed income entitlement of holder of |
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absolute interest following limited interest), |
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section 673 (successive interests: payments in respect of limited interests followed |
| |
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section 674 (successive interests: holders of limited interest), and |
| 15 |
section 675 (basic amount of estate income: successive limited interests). |
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Relief where foreign estates have borne UK income tax |
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677 | Relief where UK income tax borne by foreign estate: absolute interests |
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(1) | This section applies if— |
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(a) | an estate is a foreign estate in relation to a tax year, |
| 20 |
(b) | United Kingdom income tax has been charged on a person for the tax |
| |
year on estate income treated as arising from the estate under section |
| |
652 (estate income: absolute interests in residue), and |
| |
(c) | United Kingdom income tax has already been borne by part of the |
| |
aggregate income of the estate for the tax year. |
| 25 |
(2) | If the person makes a claim under this section, the income tax charged on the |
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person on that estate income is to be reduced by an amount equal to—![equation: cross[char[T],over[char[A],char[B]]]](missing.gif) |
| |
| |
T is the income tax charged on the person, |
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A is so much of the aggregate income of the estate as has already borne |
| 30 |
United Kingdom income tax for the tax year, and |
| |
B is the aggregate income of the estate for the tax year. |
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678 | Relief where UK income tax borne by foreign estate: limited and |
| |
| |
(1) | This section applies if— |
| 35 |
(a) | an estate is a foreign estate in relation to a tax year, |
| |
(b) | United Kingdom income tax has been charged on a person for the tax |
| |
year on estate income from the estate treated as arising under— |
| |
(i) | section 654 (estate income: limited interests in residue), or |
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|
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|
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|
(ii) | section 655 (estate income: discretionary interests in residue), |
| |
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(c) | United Kingdom income tax has already been borne by part of the |
| |
aggregate income of the estate for the tax year. |
| |
(2) | If the person makes a claim under this section, the income tax charged on the |
| 5 |
person on that estate income is to be reduced by an amount equal to![equation: cross[char[T],over[plus[char[A],minus[char[C]]],plus[char[B],minus[char[C]]]]]](missing.gif) |
| |
| |
T is the income tax charged on the person, |
| |
A is so much of the aggregate income of the estate as has already borne |
| |
United Kingdom income tax for the tax year, |
| 10 |
B is the aggregate income of the estate for the tax year, and |
| |
C is the amount of United Kingdom income tax already borne by the |
| |
aggregate income of the estate for the tax year. |
| |
| |
679 | Income from which basic amounts are treated as paid |
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(1) | The part of the aggregate income of the estate from which a basic amount is |
| |
treated as paid is determined by applying assumptions A and B in that order. |
| |
(2) | Assumption A is that if there are different persons with interests in the residue |
| |
of the estate, payments in respect of their basic amounts are paid out of the |
| |
different parts of the aggregate income of the estate in such proportions as are |
| 20 |
just and reasonable for their different interests. |
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(3) | Assumption B is that payments are made from those parts in the following |
| |
| |
(a) | income bearing income tax at the basic rate, |
| |
(b) | income bearing income tax at the lower rate, and |
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(c) | income bearing income tax at the dividend ordinary rate. |
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(4) | If some, but not all, of the aggregate income of the estate is income treated |
| |
under section 680 as bearing income tax, assumption C is applied before |
| |
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(5) | Assumption C is that the basic amount is paid from income that is not within |
| 30 |
section 680 before it is paid from income within that section. |
| |
(6) | Assumptions A and B then apply— |
| |
(a) | first to determine the part of the income not within that section from |
| |
which the basic amount is paid, and |
| |
(b) | then to determine the part of the income within that section from which |
| 35 |
the basic amount is paid. |
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680 | Income treated as bearing income tax |
| |
(1) | This section has effect for the purposes of— |
| |
|
| |
|
| |
|
section 663 (the applicable rate for grossing up basic amounts of estate |
| |
| |
section 670 (applicable rate for determining assumed income entitlement |
| |
| |
section 679 (income from which basic amounts are treated as paid). |
| 5 |
(2) | If the aggregate income of the estate includes a sum within subsection (3) or (4), |
| |
the sum is treated as bearing income tax at the rate specified for it in that |
| |
| |
(3) | The following sums are treated as bearing income tax at the dividend ordinary |
| |
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(a) | a sum charged under Chapter 3 of Part 4 (dividends etc. from UK |
| |
resident companies etc.), or |
| |
(b) | a sum that is part of the aggregate income of the estate because of |
| |
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(i) | section 664(2)(c) (stock dividends), or |
| 15 |
(ii) | section 664(2)(d) (release of loan to participator in close |
| |
company where debt due from personal representatives). |
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(4) | A sum that is part of the aggregate income of the estate because of falling |
| |
within section 664(2)(e) (gains from life insurance contracts etc.) is treated as |
| |
bearing income tax at the lower rate. |
| 20 |
(5) | Income tax treated as borne under section 656(3) or 657(4) (gross amount of |
| |
estate income treated as bearing tax at the applicable rate) is not repayable so |
| |
far as the basic amount of the estate income in question is paid from sums |
| |
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681 | Transfers of assets etc. treated as payments |
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(1) | For the purposes of this Chapter— |
| |
(a) | a transfer of assets, or |
| |
(b) | the appropriation of assets by personal representatives to themselves, |
| |
| is treated as the payment of an amount equal to the assets’ value at the date of |
| |
transfer or appropriation. |
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(2) | The set off or release of a debt is treated for the purposes of this Chapter as the |
| |
payment of an amount equal to it. |
| |
(3) | If at the end of the administration period— |
| |
(a) | there is an obligation to transfer assets to any person, or |
| |
(b) | personal representatives are entitled to appropriate assets to |
| 35 |
| |
| an amount equal to the assets’ value at that time is treated as payable then for |
| |
the purposes of this Chapter. |
| |
(4) | If at the end of the administration period— |
| |
(a) | there is an obligation to release or set off a debt owed by any person, or |
| 40 |
(b) | personal representatives are entitled to release or set off a debt in their |
| |
| |
| a sum equal to the debt is treated as payable then for the purposes of this |
| |
| |
|
| |
|
| |
|
682 | Assessments, adjustments and claims after the administration period |
| |
(1) | This subsection applies if after the administration period ends it is apparent |
| |
that a person is liable for income tax on estate income for any tax year who |
| |
previously appeared not to be so liable or to be liable for tax on a lesser amount. |
| |
(2) | If subsection (1) applies— |
| 5 |
(a) | the person may be assessed and taxed for the tax year, and |
| |
(b) | any relief or additional relief to which the person may be entitled for |
| |
the tax year is to be allowed if a claim is made. |
| |
(3) | This subsection applies if after the administration period ends it is apparent |
| |
that a person who previously appeared to be liable for income tax on estate |
| 10 |
income for any tax year is not so liable or is liable for tax on a lesser amount. |
| |
(4) | If subsection (3) applies— |
| |
(a) | all necessary adjustments and repayments of income tax for the tax year |
| |
| |
(b) | if the person has been allowed relief which exceeds the relief that could |
| 15 |
have been given by reference to the amount actually charged for the tax |
| |
year, income tax is charged on the person for that year under this |
| |
subsection on the excess. |
| |
(5) | An assessment or adjustment made for the purposes of this Chapter or a claim |
| |
made as a result of this Chapter may be made after the end of the period |
| 20 |
otherwise allowed if it is made on or before the third anniversary of the normal |
| |
self-assessment filing date for the tax year in which the administration period |
| |
| |
| |
Annual payments not otherwise charged |
| 25 |
683 | Charge to tax on annual payments not otherwise charged |
| |
(1) | Income tax is charged under this Chapter on annual payments that are not |
| |
charged to income tax under or as a result of any other provision of this Act or |
| |
| |
(2) | Subsection (1) does not apply to annual payments that would be charged to |
| 30 |
income tax under or as a result of another provision but for an exemption. |
| |
(3) | The frequency with which payments are made is ignored in determining |
| |
whether they are annual payments for the purposes of this Chapter. |
| |
(4) | For exemptions, see in particular— |
| |
(a) | sections 727 to 730 (certain annual payments by individuals), |
| 35 |
(b) | section 731 (periodical payments of personal injury damages), |
| |
(c) | section 732 (compensation awards), |
| |
(d) | section 734 (payments from trusts for injured persons), |
| |
(e) | sections 735 to 743 (health and employment insurance payments), |
| |
(f) | sections 744 to 747 (payments to adopters), |
| 40 |
(g) | section 748 (payments by persons liable to pool betting duty), |
| |
(h) | sections 757 to 767 (interest and royalty payments), and |
| |
(i) | section 776 (scholarship income). |
| |
|
| |
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