Income Tax (Trading and Other Income) Act 2005 section 680

Beneficiaries' income from estates in administration: income treated as bearing income tax

Section 680 provides a transitional rule for the tax treatment of certain life insurance gains that formed part of an estate's income before 6 April 2004.

• Applies to gains from life insurance contracts and similar policies that became part of an estate's aggregate income under the old ICTA rules.
• Only covers gains arising from events that occurred before 6 April 2004.
• Such gains are treated as bearing income tax at the basic rate for the purposes of the beneficiary income provisions.
• This is a transitional measure preserving the previous tax treatment for pre-April 2004 insurance-related gains within estates in administration.