Finance (No. 2) Act 2023

The applicable rate for grossing up basic amounts of estate income U.K.

6 (1) Chapter 3 of Part 10 of CTA 2009 (beneficiaries’ income from estates in administration) is amended as follows.

(2) In section 941 (income charged: UK estates), in subsection (2) omit “for the relevant tax year”.

(3) In section 942 (income charged: foreign estates), in subsection (3) omit “for the relevant tax year”.

(4) For section 946 (applicable rate for grossing up basic amounts of estate income) substitute—

“946 Applicable rate for grossing up basic amounts of estate income

(1) The applicable rate by reference to which a basic amount of estate income is grossed up for the purposes of sections 941 and 942 depends on the rate at which income tax was borne by the parts of the aggregate income of the estate from which section 962 treats the basic amount as having been paid.

(2) If the same rate was borne by all of the income from which section 962 treats the basic amount as having been paid, the applicable rate is that rate.

(3) If different rates were borne by different parts of the income from which section 962 treats the basic amount as having been paid, each of those rates is the applicable rate by reference to which the corresponding part of the basic amount is grossed up.”

(5) After section 961 insert—

“961A Meaning of “the relevant tax year”

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.”