Income charged and person liableU.K.
656Income charged: UK estatesU.K.
(1)In the case of a UK estate, tax is charged under section 649 on the amount of estate income treated as arising in the tax year.
(2)That amount is the basic amount of that income for the tax year (see subsection (4)) grossed up by reference to the applicable rate for that year (see section 663).
(3)The gross amount is treated as having borne income tax at that rate.
(4)In this Chapter “the basic amount”, in relation to estate income, has the meaning given by—
(a)section 660 (basic amount of estate income: absolute interests),
(b)section 661 (basic amount of estate income: limited interests),
(c)section 662 (basic amount of estate income: discretionary interests), and
(d)section 675 (basic amount of estate income: successive limited interests).
657Income charged: foreign estatesU.K.
(1)In the case of a foreign estate, tax is charged under section 649 on the full amount of estate income treated as arising in the tax year.
(2)That amount depends on whether the estate income arising in the tax year is paid from sums within section [F1680(4)] (sums treated as bearing income tax).
(3)So far as the estate income is paid from such sums, that amount is the basic amount of that income for the tax year grossed up by reference to the applicable rate for that year (see section 663).
(4)That gross amount is treated as having borne income tax at that rate.
(5)So far as the estate income is not paid from sums within section [F1680(4)], the amount of estate income treated as arising in the tax year is the basic amount of that income for that year.
Textual Amendments
F1Word in s. 657 substituted (with effect in accordance with Sch. 1 para. 73 of the amending Act) by Finance Act 2016 (c. 24), Sch. 1 para. 21
658Special rules for foreign incomeU.K.
(1)The charge to tax under section 649 on the amount of income arising in a tax year is subject to Part 8 (foreign income: special rules).
(2)For the purposes of section 830(1) (meaning of “relevant foreign income”) amounts charged to tax under section 649—
(a)are treated as arising from a source outside the United Kingdom if the estate is a foreign estate, and
(b)are treated as not arising from such a source if the estate is a UK estate.
659Person liableU.K.
(1)If the estate income is from a person's absolute interest or limited interest, that person is liable for any tax charged under section 649 unless subsection (3) or (4) provides that another person is liable.
(2)If the estate income is from a discretionary interest, the person in whose favour the discretion is exercised in making the payment in question is liable for any tax charged under section 649.
(3)If, in a case where the estate income is from an absolute interest—
(a)section 671 (successive absolute interests) applies, or
(b)section 672 (successive interests: assumed income entitlement of holder of absolute interest following limited interest) applies and the income is treated as arising because of that section,
the person by reference to whose assumed income entitlement the estate income is determined is liable for any tax charged under section 649.
(4)If, in a case where the estate income is from a limited interest—
(a)section 673(1) applies and the income is treated as arising because of section 673(2) (payment in respect of a previous limited interest), or
(b)section 674 (successive interests: holders of limited interests) applies,
the person entitled to receive the payment in question is liable for any tax charged under section 649.