Modifications etc. (not altering text)
C1Pt. 15 modified (with effect in accordance with s. 105(1) of the modifying Act) by Finance Act 1996 (c. 8), Sch. 13 para. 6(1) (with Sch. 13 para. 16, Sch. 15)
Textual Amendments
F1Pt. 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
(1)The expenses of [F2the trustees of a settlement] 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) [F3, (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) [F4or (2A)] below before being set against income falling within subsection (3) below; [F5 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—]
[F6(a)so much of the income of the trustees as is income chargeable under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.);
(b)income treated as arising to the trustees under Chapter 5 of that Part (stock dividends from UK resident companies); or
(c)income chargeable under Chapter 6 of that Part (release of loan to participator in close company).]
[F7(2A)Income falls within this subsection if it is [F8—
(a)income chargeable under Chapter 4 of Part 4 of ITTOIA 2005 (dividends from non-UK resident companies); or
(b)a relevant foreign distribution chargeable under Chapter 8 of Part 5 of that Act (income not otherwise charged).]]
[F9(2B)In subsection (2A) “relevant foreign distribution” means any distribution of a company not resident in the United Kingdom which—
(a)is not chargeable under Chapter 4 of Part 4 of ITTOIA 2005, but
(b)would be chargeable under Chapter 3 of that Part if the company were resident in the United Kingdom.]
(3)Income falls within this subsection if it is income to which section 1A applies but which does not fall within subsection (2) [F10or (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
F2Words in s. 689B(1) substituted (6.4.2006) by Finance Act 2006 (c. 25), Sch. 13 paras. 20, 27(1)
F3Words 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)
F4Words 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)
F5S. 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)
F6S. 689B(2)(a)-(c) substituted for s. 689(2)(za)-(c) (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 280(2) (with Sch. 2)
F7S. 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)
F8S. 689B(2A)(a)(b) substituted for words in s. 689(2A) (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 280(3) (with Sch. 2)
F9S. 689B(2B) inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 280(4) (with Sch. 2)
F10Words 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)