Income Tax (Trading and Other Income) Act 2005 section 550

Income tax treated as paid

Section 550 confirms that income tax deemed to have been deducted from income arising to unit holders of unauthorised unit trusts is treated as tax already paid by the unit holder, subject to double tax relief provisions.

• When income arises to a unit holder from an unauthorised unit trust, a deemed deduction of income tax applies under the relevant provisions of ITA 2007
• The amount representing this deemed income tax deduction is treated as income tax actually paid by the unit holder
• This treatment allows the unit holder to set the deemed tax paid against their overall income tax liability or claim a repayment if appropriate
• The deemed tax paid treatment is subject to an exception where double tax relief applies, which prevents the same income being relieved twice