Part 10 U.K.Miscellaneous income

Chapter 3 U.K.Beneficiaries' income from estates in administration

Relief where foreign estates have borne UK income tax U.K.

960 Relief in respect of tax relating to absolute interests U.K.

(1) This section applies if—

(a) United Kingdom corporation tax has been charged on a company for an accounting period on estate income treated as arising from an estate under section 937 (estate income: absolute interests in residue),

(b) the estate is a foreign estate in relation to the relevant tax year, and

(c) United Kingdom income tax has already been borne by part of the aggregate income of the estate for the relevant tax year.

(2) If the company makes a claim under this section, the corporation tax charged on the company on that estate income is to be reduced by an amount equal to—

where—

T is the corporation tax charged on the company,

A is so much of the aggregate income of the estate as has already borne United Kingdom income tax for the relevant tax year, and

B is the aggregate income of the estate for the relevant tax year.

961 Relief in respect of tax relating to limited or discretionary interests U.K.

(1) This section applies if—

(a) United Kingdom corporation tax has been charged on a company for an accounting period on estate income from an estate treated as arising under—

(i) section 939 (estate income: limited interests in residue), or

(ii) section 940 (estate income: discretionary interests in residue),

(b) the estate is a foreign estate in relation to the relevant tax year, and

(c) United Kingdom income tax has already been borne by part of the aggregate income of the estate for the relevant tax year.

(2) If the company makes a claim under this section, the corporation tax charged on the company on that estate income is to be reduced by an amount equal to—

where—

T is the corporation tax charged on the company,

A is so much of the aggregate income of the estate as has already borne United Kingdom income tax for the relevant tax year,

B is the aggregate income of the estate for the relevant tax year, and

C is the amount of United Kingdom income tax already borne by the aggregate income of the estate for the relevant tax year.

[F1 961A Meaning of “the relevant tax year” U.K.

In sections 960 and 961, “the relevant tax year” in relation to an amount of estate income, means the tax year in which the amount of estate income would be treated as arising if—

(a) the references in this Chapter to accounting periods were references to tax years, and

(b) section 950(3) (apportionment between accounting periods) were ignored.]

Textual Amendments

F1 S. 961A inserted (with effect in relation to accounting periods beginning on or after 1.4.2023) by Finance (No. 2) Act 2023 (c. 30), Sch. 2 paras. 6(5), 14(2)(b)