Income Tax (Trading and Other Income) Act 2005 section 659

Person liable

Section 659 identifies which person is liable for income tax on estate income, depending on the type of interest the beneficiary holds in the estate.

• A beneficiary with an absolute or limited interest is generally liable for tax on their estate income, unless specific successive interest rules apply.
• Where estate income arises from a discretionary interest, the person in whose favour the discretion is exercised is liable for the tax.
• In cases involving successive absolute interests, the person whose assumed income entitlement determines the estate income bears the tax liability.
• In cases involving successive limited interests, the person entitled to receive the relevant payment is liable for the tax.