Corporation Tax Act 2009 section 963

Income treated as bearing income tax

Section 963 sets out the rules for determining the rate of income tax that certain types of estate income are treated as having already borne, which affects how estate income is grossed up and allocated to corporate beneficiaries.

• Where a UK estate's total income is at or below the de minimis threshold, all of that income is treated as bearing income tax at 0%.
• Dividends from UK resident companies and stock dividends forming part of the estate's aggregate income are treated as bearing income tax at the dividend ordinary rate.
• Gains from life insurance contracts included in the estate's aggregate income are treated as bearing income tax at the basic rate.
• Income tax treated as borne on estate income is not repayable to the extent that the underlying payment comes from sums covered by these special rate rules or from income treated as bearing tax at 0%.