Income Tax Act 2007 section 480

Meaning of "accumulated or discretionary income"

Section 480 defines what counts as "accumulated or discretionary income" for trust taxation purposes, determining when trust income is subject to the special trust rates of tax rather than being taxed on individual beneficiaries.

• Trust income is "accumulated or discretionary" where it must be accumulated or where trustees (or another person) have discretion over whether to accumulate it, who receives it, or how much each person receives
• Income to which a beneficiary is already entitled as it arises (an interest in possession) is excluded from this definition and is not treated as accumulated or discretionary income
• Income from property held for the purposes of certain overseas superannuation funds is excluded, provided the property is not held as a member of a property investment LLP
• Income from service charges on UK dwellings held on trust is also excluded from the definition