Corporation Tax Act 2009 section 946

Applicable rate for grossing up basic amounts of estate income

Section 946 explains how to determine the correct tax rate to use when grossing up basic amounts of estate income that a corporate beneficiary receives from an estate in administration.

• Basic amounts of estate income must be grossed up by reference to the income tax rate borne by the estate's aggregate income from which the payment is treated as being made.
• Where all of the relevant estate income bore tax at the same rate, that single rate is used as the applicable rate for grossing up.
• Where different parts of the relevant estate income bore tax at different rates, each rate is applied to gross up the corresponding portion of the basic amount separately.
• The relevant tax year is determined by reference to the tax year in which the income would have arisen had the rules referred to tax years rather than accounting periods.