Income Tax Act 2007 section 943

Calculation of trustees' income pool

Section 943 prescribes the method for calculating the "income pool" of an unauthorised unit trust (UUT), which is used when the grossed-up amounts treated as paid to unit holders exceed the trustees' modified net income in any tax year.

• The income pool is a running total of the cumulative excess of the trustees' modified net income over grossed-up amounts treated as paid to unit holders, carried forward from year to year.
• In any tax year where modified net income exceeds amounts treated as paid, the surplus is added to the pool; where amounts treated as paid exceed modified net income, the shortfall is deducted from the pool.
• For any tax year in which the UUT trustees were non-UK resident, no adjustment is made to the income pool, even though there may be modified net income for that year.
• The income pool starts at nil in the tax year the UUT is established, and thereafter is recalculated at the start of each tax year based on the prior year's figures.