Income and Corporation Taxes Act 1988

[F1 689B Order in which expenses to be set against income. U.K.

(1) The expenses of any trustees in any year of assessment, so far as they are properly chargeable to income (or would be so chargeable but for any express provisions of the trust), shall be treated—

(a) as set against so much (if any) of any income as is income falling within subsection (2) [F2 , (2A)] or (3) below before being set against other income; and

(b) as set against so much (if any) of any income as is income falling within subsection (2) [F3 or (2A)] below before being set against income falling within subsection (3) below; [F4 and

(c) as set against so much (if any) of any income as is income falling within subsection (2) below before being set against income falling within subsection (2A) below].

(2) Income falls within this subsection if it is—]

[F5 (za) so much of the income of the trustees as is income chargeable under Schedule F;]

(a) so much of the income of the trustees as is income the amount or value of which is determined in accordance with section 233(1A);

[F6 (aa) so much of the income of the trustees as is a non-qualifying distribution, within the meaning of section 233(1B);]

(b) income which is treated as having arisen to the trustees by virtue of section F7 . . . 249(6); or

(c) income which is treated as received by the trustees by virtue of section 421(1)(a).

[F8 (2A) Income falls within this subsection if it is income to which section 1A applies by virtue of its being equivalent foreign income falling within subsection (3)(b) of that section and chargeable under Case V of Schedule D.]

(3) Income falls within this subsection if it is income to which section 1A applies but which does not fall within subsection (2) [F9 or (2A)] above.

(4) This section has effect—

(a) subject to sections 686(2A) and 689A, but

(b) notwithstanding anything in section 1A(5) and (6).

Textual Amendments

F1 Pt. 15 Ch. 1D (ss. 689A, 689B) inserted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by Finance Act 1996 (c. 8), Sch. 6 para. 16

F2 Words in s. 689B(1)(a) inserted (with effect in accordance with Sch. 4 para. 16(6) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 16(2)(a)

F3 Words in s. 689B(1)(b) inserted (with effect in accordance with Sch. 4 para. 16(6) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 16(2)(b)

F4 S. 689B(1)(c) and preceding word added (with effect in accordance with Sch. 4 para. 16(6) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 16(2)(c)

F5 S. 689B(2)(za) inserted (with effect in accordance with Sch. 4 para. 16(6) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 16(3)(a)

F6 S. 689B(2)(aa) inserted (with effect in accordance with Sch. 4 para. 16(6) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 16(3)(b)

F7 Words in s. 689B(2)(b) repealed (with effect in accordance with Sch. 6 para. 11(2) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 6 para. 11(1), Sch. 8 Pt. 2(11), Note

F8 S. 689B(2A) inserted (with effect in accordance with Sch. 4 para. 16(6) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 16(4)

F9 Words in s. 689B(3) inserted (with effect in accordance with Sch. 4 para. 16(6) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 16(5)