Income Tax (Trading and Other Income) Act 2005 section 657

Income charged: foreign estates

Section 657 sets out how the taxable amount of estate income is determined for beneficiaries of foreign estates in administration.

• Tax is charged on the full amount of estate income treated as arising in the tax year from a foreign estate.
• The taxable amount depends on whether the estate income is paid from sums treated as already bearing income tax.
• Where income is paid from sums treated as bearing income tax, the basic amount is grossed up at the applicable rate, and the grossed-up amount is treated as having already borne tax at that rate.
• Where income is not paid from sums treated as bearing income tax, the taxable amount is simply the basic amount of that income for the year, with no grossing up.