Income Tax Act 2007 section 510

Sums applied for property maintenance purposes

Section 510 ensures that where sums exceeding the income of a heritage maintenance settlement are applied for property maintenance purposes, the excess is not subject to an additional income tax charge on any person.

• This section applies where no election has been made under section 508, so the settlement income is taxed on the settlor under the settlements legislation
• Where a sum greater than the year's income is applied for property maintenance, the excess is protected from further income tax charges
• Without this relief, the excess could be taxed on a person because of their interest in or occupation of the maintained property, or as a capital sum paid to the settlor
• The effect is that only the settlement income for the year is taxed (on the settlor), and no additional tax arises on the excess amount used for maintenance

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