Corporation Tax Act 2009 section 961

Relief in respect of tax relating to limited or discretionary interests

Section 961 provides relief from corporation tax where a company with a limited or discretionary interest in the residue of a foreign estate receives estate income that has already borne UK income tax.

• Applies where UK corporation tax has been charged on estate income from a foreign estate arising under a limited interest (section 939) or discretionary interest (section 940) in residue
• The estate must be a foreign estate in the relevant tax year, and UK income tax must already have been borne by part of the estate's aggregate income
• On making a claim, the company can obtain a reduction in its corporation tax calculated by a specific formula that takes into account the proportion of aggregate income already taxed
• The formula reduces the corporation tax by the fraction T × (A − C) / (B − C), where T is the corporation tax charged, A is the taxed portion of aggregate income, B is total aggregate income, and C is the UK income tax already borne