Corporation Tax Act 2009 section 940

Discretionary interests in residue

Section 940 explains how income arising from a company's discretionary interest in the residue of an estate is treated for corporation tax purposes.

• Where a company holds a discretionary interest in all or part of the residue of an estate, income is treated as arising when a payment is actually made in the company's favour.
• The income is recognised in the accounting period in which the payment is made under the exercise of discretion.
• Any income treated as arising under this rule counts as "estate income" for corporation tax purposes.
• This provision mirrors the equivalent income tax rule that applies to individuals with discretionary interests in estate residue.