Corporation Tax Act 2009 section 954

Successive absolute interests

Section 954 deals with the situation where two or more different persons hold absolute interests in the residue of an estate one after another during the administration period, and how the later holder's taxable entitlement is calculated.

• Where successive absolute interests arise, the later holder's share of residuary income and basic amounts include those of all previous holders
• Calculations must be performed in chronological order, dealing with earlier interest holders before later ones
• In the final accounting period, a previous holder is taxed as if it were not the final period, so that the last holder bears the tax on the full assumed income entitlement
• Any reduction in residuary income under section 951 is calculated across all successive interests together, with any excess reduction applied backwards through previous holders