Corporation Tax Act 2009 section 945

Discretionary interests

Section 945 explains how to calculate the basic amount of estate income for a company that holds a discretionary interest in the residue of an estate.

• This section applies where a company has a discretionary interest in all or part of the residue of a deceased person's estate.
• The basic amount of estate income is simply the total of all payments made to the company during the accounting period under the discretion.
• Unlike fixed interests, where the basic amount may require apportionment calculations, the figure for discretionary interests is straightforward — it equals whatever was actually paid out.
• This rule mirrors the equivalent income tax provision for individuals, ensuring consistent treatment across the tax system.