Income and Corporation Taxes Act 1988

[F1 699A Untaxed sums comprised in the income of the estate. U.K.

(1) In this section “a relevant amount” means so much of any amount which a person is deemed by virtue of this Part to receive or to have a right to receive as is or would be paid out of sums which—

(a) are included in the aggregate income of the estate of the deceased by virtue of any of sections F2 . . . 249(5), 421(2) and 547(1)(c); and

(b) are sums in respect of which the personal representatives are not directly assessable to United Kingdom income tax;

[F3 or out of any sums included in the aggregate income of the estate of the deceased which fall within subsection (1A) below.]

[F4 (1A) A sum falls within this subsection if it is a sum in respect of—

[F5 (a) a distribution chargeable under Schedule F; or

(b)] a distribution to which section 233(1) applies.

(1B) Any reference in this Part to a sum to which subsection (1)(a) and (b) above applies includes a reference to a sum falling within subsection (1A) above which is included in the aggregate income of the estate of the deceased.]

(2) In determining for the purposes of this Part whether any amount is a relevant amount—

(a) such apportionments of any sums to which subsection (1)(a) and (b) above applies shall be made between different persons with interests in the residue of the estate as are just and reasonable in relation to their different interests; and

(b) subject to paragraph (a) above, the [F6 assumptions] in section 701(3A)(b) shall apply, but (subject to that) it shall be assumed that payments are to be made out of other sums comprised in the aggregate income of the estate before they are made out of any sums to which subsection (1)(a) and (b) above applies.

(3) In the case of a foreign estate, and notwithstanding anything in section 695(4)(b) or 696(6), a relevant amount shall be deemed—

(a) to be income of such amount as would, after deduction of income tax for the year in which it is deemed to be paid, be equal to the relevant amount; and

(b) to be income that has borne tax at the applicable rate.

(4) Sums to which subsection (1)(a) and (b) above applies shall be assumed, for the purpose of determining the applicable rate in relation to any relevant amount, to bear tax—

(a) in the case of sums included by virtue of section F2 . . . 249(5) or 421(2), at the [F7 Schedule F ordinary rate], and

(b) in the case of sums included by virtue of section 547(1)(c), at the basic rate [F8 ; and

(c) in the case of sums falling within subsection (1A) above, at the [F7 Schedule F ordinary rate].]

(5) No repayment shall be made of any income tax which by virtue of this Part is treated as having been borne by the income that is represented by a relevant amount.

(6) For the purposes of sections 348 and 349(1) the income represented by a relevant amount shall be treated as not brought into charge to income tax [F9 except to the extent that the relevant amount is or would be paid out of sums in respect of a distribution chargeable under Schedule F].]

Textual Amendments

F1 S. 699A inserted (with effect in accordance with s. 76(6) of the amending Act) by Finance Act 1995 (c. 4), s. 76(4)

F2 Words in s. 699A(1)(a)(4)(a) repealed (with effect in accordance with Sch. 6 para. 12(2) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 6 para. 12(1), Sch. 8 Pt. 2(11)

F3 Words in s. 699A(1) inserted (with effect in accordance with s. 21(5) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 21(2)

F4 S. 699A(1A)(1B) inserted (with effect in accordance with s. 21(5) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 21(3)

F5 Words in s. 699A(1A) inserted (with effect in accordance with s. 33(10) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 33(3)

F6 Word in s. 699A(2)(b) substituted (with effect in accordance with s. 33(11) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 33(4)

F7 Words in s. 699A(4)(a)(c) substituted (with effect in accordance with s. 33(11) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 33(5)

F8 S. 699A(4)(c) and preceding word inserted (with effect in accordance with s. 21(5) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 21(4)

F9 Words in s. 699A(6) added (with effect in accordance with s. 33(11) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 33(6)