Income Tax (Trading and Other Income) Act 2005 (c. 5)

Part 4 U.K. Savings and investment income

Chapter 10 U.K. Distributions from unauthorised unit trusts

547 Charge to tax under Chapter 10 U.K.

(1) Income tax is charged on income treated as received by a unit holder from a [F1 unit trust scheme to which this section applies] .

(2) For the purposes of this Chapter, a unit holder is treated as receiving such income if an amount is shown in the scheme's accounts as income available for payment to unit holders or for investment.

[F2 (3) This section applies to a unit trust scheme if—

(a) the scheme is an unauthorised unit trust, and

(b) the trustees of the scheme are UK resident.]

Textual Amendments

F1 Words in s. 547(1) substituted (6.4.2007 with effect as stated in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1034, Sch. 1 para. 541(2) (with transitional provisions and savings in Sch. 2)

F2 S. 547(3) inserted (6.4.2007 with effect as stated in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1034, Sch. 1 para. 541(3) (with transitional provisions and savings in Sch. 2)

548 Income charged U.K.

(1) Tax is charged under this Chapter on the gross amount of the income treated as received by the unit holder in the tax year.

(2) To calculate the gross amount of the income treated as received by a unit holder for a distribution period—

Step 1

Calculate the unit holder's share of the scheme's available income by applying the formula—

where—

SAI is the total amount shown in the scheme's accounts as income available for payment to unit holders or for investment,

R is the unit holder's rights, and

TR is all the unit holders' rights.

Step 2

Gross up the unit holder's share of the scheme's available income by reference to the basic rate for the tax year in which the income from the scheme is treated as received.

(3) The income from a scheme for a distribution period is treated as received on the date or latest date provided by the terms of the scheme for any distribution for the period, unless that date is more than 12 months after it ends.

(4) If—

(a) that date is more than 12 months after the distribution period ends, or

(b) no date is so provided,

the income for the period is treated as received on the last day of the period.

(5) In this section “distribution period” means a period over which income from the investments subject to the trusts is aggregated to ascertain the amount available for distribution to unit holders.

This is subject to subsections (6) and (7).

(6) If the scheme does not provide for distribution periods, its distribution periods are taken to be successive periods of 12 months, the first of which began with the day on which the scheme took effect.

(7) If the scheme provides for a distribution period of more than 12 months, each successive period of 12 months within that period and any remaining period of less than 12 months are taken to be distribution periods.

549 Person liable U.K.

The person liable for any tax charged under this Chapter is the unit holder treated as receiving the income under section 547(2).

[F3 550 Income tax treated as paid U.K.

In accordance with section 848 of ITA 2007, a sum representing income tax treated as deducted from income within this Chapter as a result of section 941 of that Act (deemed deduction from unit holder's income) is[F4 , subject to section 943A of that Act (treatment of cases involving double tax relief),] treated as income tax paid by the unit holder.]

Textual Amendments

F3 S. 550 substituted (6.4.2007 with effect as stated in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1034, Sch. 1 para. 542 (with transitional provisions and savings in Sch. 2)

F4 Words in s. 550 inserted (8.4.2010) (with effect in accordance with Sch. 13 para. 3 to the amending Act) by Finance Act 2010 (c. 13), Sch. 13 para. 2(1)