Income Tax (Trading and Other Income) Act 2005 section 649

Charge to tax on estate income

Section 649 establishes the charge to income tax on estate income received by beneficiaries of a deceased person's estate, and defines the key terms used throughout Chapter 6.

• Income tax is charged on estate income arising from absolute, limited or discretionary interests in the residue of a deceased person's estate, whether that estate is based in the UK or overseas
• A de minimis exemption applies where the aggregate income of the estate is small enough to be treated as bearing income tax at 0% under section 680(1A) — estate income consisting of basic amounts paid from such de minimis income is not charged to tax
• Estate income is treated as income for income tax purposes, even though payments from personal representatives to residuary beneficiaries would otherwise be regarded in law as capital payments
• Where different parts of an estate are subject to different residuary dispositions, each part is treated as a separate estate for the purposes of this Chapter