House of Commons portcullis
House of Commons
Session 2008 - 09
Internet Publications
Other Bills before Parliament

Corporation Tax Bill


Corporation Tax Bill
Part 10 — Miscellaneous income
Chapter 1 — Introduction

440

 

(4)   

If an item of property is sold together with other property, then, for the

purposes of the charges under sections 908 and 912

(a)   

the net proceeds of the sale of that item are treated as being so much of

the net proceeds of the sale of all the property as, on a just and

reasonable apportionment, is attributable to that item, and

5

(b)   

the expenditure incurred on the provision or purchase of that item is

treated as being so much of the consideration given for all the property

as, on a just and reasonable apportionment, is attributable to that item.

930     

Questions about apportionments affecting two or more persons

(1)   

Any question about the way in which a sum is to be apportioned under section

10

929 must be determined in accordance with section 563(2) to (6) of CAA 2001

(procedure for determining certain questions affecting two or more persons) if

it materially affects two or more taxpayers.

(2)   

For the purposes of subsection (1) a question materially affects two or more

taxpayers if at the time when the question falls to be determined it appears that

15

the determination is material to the liability to tax (for whatever period) of two

or more persons.

931     

Meaning of “capital sums” etc

Section 4 of CAA 2001 (meaning of “capital sums” etc) applies in relation to this

Part as it applies in relation to that Act.

20

Part 10

Miscellaneous income

Chapter 1

Introduction

932     

Overview of Part

25

(1)   

This Part applies the charge to corporation tax on income to—

(a)   

dividends of a non-UK resident company (see Chapter 2),

(b)   

beneficiaries’ income from estates in administration (see Chapter 3),

(c)   

income from the holding of an office (see Chapter 4),

(d)   

income treated as received from unauthorised unit trusts (see Chapter

30

5),

(e)   

income treated as arising from the sale or other realisation of dividend

coupons in respect of foreign holdings (see Chapter 6),

(f)   

annual payments not otherwise charged to corporation tax (see

Chapter 7), and

35

(g)   

other income not otherwise charged to corporation tax (see Chapter 8).

(2)   

Chapter 9 contains rules that give priority to provisions outside this Part in

relation to matters that fall within Chapter 2, 5 or 6.

(3)   

This Part needs to be read with Part 19 (general exemptions).

 
 

Corporation Tax Bill
Part 10 — Miscellaneous income
Chapter 3 — Beneficiaries’ income from estates in administration

441

 

Chapter 2

Dividends of non-UK resident companies

933     

Charge to tax on dividends of non-UK resident companies

(1)   

The charge to corporation tax on income applies to dividends of a non-UK

resident company.

5

(2)   

In subsection (1) “dividends” does not include dividends of a capital nature.

Chapter 3

Beneficiaries’ income from estates in administration

Introduction

934     

Charge to tax on estate income

10

(1)   

The charge to corporation tax on income applies to estate income.

(2)   

In this Chapter—

“estate” means the estate of a deceased person (whether a UK estate or a

foreign estate), and

“estate income” means the income treated under this Chapter as arising

15

from an absolute, limited or discretionary interest in the whole or part

of the residue of an estate.

(3)   

If different parts of an estate are subject to different residuary dispositions,

those parts are treated for the purposes of this Chapter as if they were separate

estates.

20

935     

Absolute, limited and discretionary interests

(1)   

A person has an absolute interest in the whole or part of the residue of an estate

for the purposes of this Chapter if—

(a)   

the capital of the residue or that part is properly payable to the person,

or

25

(b)   

it would be so payable if the residue had been ascertained.

(2)   

A person has a limited interest in the whole or part of the residue of an estate

during any period for the purposes of this Chapter if—

(a)   

the person does not have an absolute interest in it, and

(b)   

the income from it would be properly payable to the person if the

30

residue had been ascertained at the beginning of that period.

(3)   

A person has a discretionary interest in the whole or part of the residue of an

estate for the purposes of this Chapter if—

(a)   

a discretion may be exercised in the person’s favour, and

(b)   

on its exercise in the person’s favour any of the income of the residue

35

during the whole or part of the administration period (see section 938)

would be properly payable to the person if the residue had been

ascertained at the beginning of that period.

 
 

Corporation Tax Bill
Part 10 — Miscellaneous income
Chapter 3 — Beneficiaries’ income from estates in administration

442

 

(4)   

For the purposes of this section, an amount is only treated as properly payable

to a person (“A”) if—

(a)   

it is properly payable to A, or to another person in A’s right, for A’s

benefit, or

(b)   

A is a personal representative and subsection (5) applies.

5

(5)   

The personal representatives of a deceased person (“B”) are to be treated as

having an absolute or limited interest in the whole or part of the residue of the

estate of another deceased person (“C”) if—

(a)   

they have a right in their capacity as B’s personal representatives, and

(b)   

were the right vested in them for their own benefit, they would have

10

that interest in C’s estate.

(6)   

For the purposes of subsection (4), it does not matter whether the amount is

payable directly by the personal representatives or through a trustee or other

person.

936     

Meaning of “UK estate” and “foreign estate”

15

(1)   

In this Chapter—

“UK estate”, in relation to a tax year, means an estate which meets

conditions A and B, or condition C, for that year, and

“foreign estate”, in relation to a tax year, means an estate which is not a

UK estate in relation to that year.

20

(2)   

Condition A is that all the income of the estate either—

(a)   

has borne United Kingdom income tax by deduction, or

(b)   

is income in respect of which the personal representatives are directly

assessable to United Kingdom income tax for the tax year.

(3)   

Condition B is that none of the income of the estate is income for which the

25

personal representatives are not liable to United Kingdom income tax for the

tax year because they are not UK resident or not ordinarily UK resident.

(4)   

For the purposes of conditions A and B, sums within section 963(3) or (4) (sums

treated as bearing income tax) are ignored.

(5)   

Condition C is that the aggregate income of the estate for the tax year consists

30

only of sums within section 963(3) or (4).

Types of estate income

937     

Absolute interests in residue

(1)   

Income is treated as arising in an accounting period from a company’s absolute

interest in the whole or part of the residue of an estate if—

35

(a)   

the company has an assumed income entitlement for the accounting

period in respect of the interest (see sections 948 to 952), and

(b)   

condition A or B is met.

(2)   

Condition A is that a payment is made in respect of the interest in the

accounting period and before the end of the administration period (see section

40

938).

 
 

Corporation Tax Bill
Part 10 — Miscellaneous income
Chapter 3 — Beneficiaries’ income from estates in administration

443

 

(3)   

Condition B is that the accounting period is the final accounting period (see

section 938).

(4)   

Income treated as arising as a result of this section is estate income for the

purposes of this Chapter.

938     

Meaning of “the administration period”, “the final accounting period” and

5

“the final tax year”

(1)   

In this Chapter “the administration period”, in relation to the estate of a

deceased person, means the period beginning with the deceased’s death and

ending with the completion of the administration of the estate.

(2)   

In the application of subsection (1) to Scotland, the reference to the completion

10

of the administration is to be taken as a reference to the date at which, after

discharge of, or provision for, liabilities falling to be met out of the deceased’s

estate, the free balance held in trust for the residuary legatees or for the persons

with the right to the intestate estate has been ascertained.

(3)   

In this Chapter “the final accounting period” means the accounting period in

15

which the administration period ends.

(4)   

In this Chapter “the final tax year” means the tax year in which the

administration period ends.

939     

Limited interests in residue

(1)   

Income is treated as arising in an accounting period from a company’s limited

20

interest in the whole or part of the residue of an estate in cases A, B and C.

(2)   

Case A is where—

(a)   

the interest has not ceased before the beginning of the accounting

period, and

(b)   

a sum is paid in respect of the interest in that period and before the end

25

of the administration period.

(3)   

Case B is where—

(a)   

the accounting period is the final accounting period,

(b)   

the interest has not ceased before the beginning of that period, and

(c)   

a sum remains payable in respect of the interest at the end of the

30

administration period.

(4)   

Case C is where—

(a)   

the accounting period is a period before the final accounting period,

(b)   

the interest ceases in the accounting period, and

(c)   

a sum is paid in respect of the interest in a later accounting period but

35

before the end of the administration period, or remains payable in

respect of it at the end of the administration period.

(5)   

This section does not apply to limited interests to which section 957 (successive

interests: holders of limited interests) applies.

(6)   

Income treated as arising as a result of this section or section 957 is estate

40

income for the purposes of this Chapter.

 
 

 
previous section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 2009
Revised 6 February 2009