Corporation Tax Act 2009 section 948

Assumed income entitlement

Section 948 explains how to determine whether a company beneficiary with an absolute interest in the residue of an estate has an "assumed income entitlement" for an accounting period, and how to calculate the amount of that entitlement.

• The assumed income entitlement is calculated by totalling the company's share of the estate's residuary income for the current and all previous accounting periods, deducting income tax at the applicable rate where the estate is a UK estate
• This cumulative total (after any income tax deduction) is then compared against the sum of all basic amounts of estate income on which the company was liable to corporation tax in previous accounting periods
• If the cumulative residuary income total exceeds the cumulative basic amounts previously taxed, the company has an assumed income entitlement equal to that excess
• Special rules apply where the company has successive absolute interests or where an absolute interest follows a limited interest in the same estate