Income Tax Act 2007 section 515

Rate of tax

Section 515 sets out the rate of tax that applies to income charged under section 512 in relation to heritage maintenance settlements.

• The tax rate is calculated by taking the additional rate of income tax for the relevant tax year and subtracting the trust rate for that same year.
• This rate applies to all types of income, including dividend income, though for dividends it does not replicate the effect of charging the settlor directly.
• Since 2004–05, the trust rate has been aligned with the higher rate, meaning the resulting charge under this calculation has effectively been nil.
• The provision remains in force and could produce a positive tax charge if future rate changes create a gap between the additional rate and the trust rate.