Corporation Tax Act 2009 section 955

Assumed income entitlement of holder of absolute interest following limited interest

Section 955 explains how to determine the assumed income entitlement of a company holding an absolute interest in an estate's residue, where that absolute interest follows one or more limited interests held by different persons during the administration period.

• Where successive interests in an estate's residue are held by different persons, and at least one is an absolute interest preceded by at least one limited interest, special rules apply — provided the later interests arise on cessation of the earlier ones otherwise than by death
• Rule A treats the company's share of residuary income as if the absolute interest had existed throughout the entire period when any preceding limited interest was in place, and as if no such limited interest had ever existed
• Rule B treats the basic amounts relating to the absolute interest as including the basic amounts that related to any preceding limited interest
• These rules work on a cumulative basis, bringing into account the residuary income shares and basic amounts from earlier accounting periods to determine whether an assumed income entitlement exists and, if so, its amount