635Amount of available incomeU.K.
(1)For the purposes of section 633 the amount of income available up to the end of any tax year is, in relation to any capital sum paid as mentioned in subsection (1) of that section by the trustees of a settlement, calculated as follows.
(2)Add together the amount of [F1unprotected] income arising under the settlement in that year and any previous year which has not been distributed.
(3)Deduct from that figure—
(a)the amount of that income taken into account under section 633 in relation to that sum in any previous year or years,
(b)the amount of that income taken into account under section 633 in relation to any other capital sums paid to the settlor in any year before that sum was paid,
(c)any income arising under the settlement in that year or any previous year which has been treated as income of the settlor under section 624 or 629, and
(d)an amount equal to the sum of tax at the [F2trust rate] on—
(i)the total amount of [F3unprotected] income arising under the settlement in that year and any previous year which has not been distributed, less
(ii)any income of the kind mentioned in paragraph (c).
(4)See sections 636 and 637 for how to calculate amounts of undistributed income.
[F4(5)In [F5this section and sections 636 and 637] “unprotected income” means income which is not protected foreign-source income, and sections 628A(2) to (13) and 628B (meaning of “protected foreign-source income”) have effect also for this purpose.]
Textual Amendments
F1Word in s. 635(2) inserted (16.11.2017) (with effect in accordance with Sch. 8 para. 39 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 8 para. 24(2)
F2Words in s. 635(3)(d) 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. 557 (with transitional provisions and savings in Sch. 2)
F3Word in s. 635(3)(d)(i) inserted (with effect in accordance with Sch. 10 para. 21 of the amending Act) by Finance Act 2018 (c. 3), Sch. 10 para. 8(a)
F4S. 635(5) inserted (16.11.2017) (with effect in accordance with Sch. 8 para. 39 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 8 para. 24(3)
F5Words in s. 635(5) substituted (with effect in accordance with Sch. 10 para. 21 of the amending Act) by Finance Act 2018 (c. 3), Sch. 10 para. 8(b)