Income Tax (Trading and Other Income) Act 2005 section 656

Income charged: UK estates

Section 656 sets out how income from a UK estate in administration is calculated for tax purposes when it arises to a beneficiary.

• The tax charge on a beneficiary's income from a UK estate is based on the estate income treated as arising in the tax year.
• The amount charged is the "basic amount" of estate income, grossed up at the applicable rate for that year.
• The grossed-up amount is treated as having already borne income tax at the applicable rate.
• The basic amount is calculated differently depending on the type of interest held — absolute, limited, discretionary, or successive limited.