Income Tax (Trading and Other Income) Act 2005 section 666

The residuary income of the estate

Section 666 explains how the residuary income of an estate in administration is calculated for a given tax year, which is essential for determining a beneficiary's assumed income entitlement.

• Residuary income equals the estate's aggregate income for the tax year minus allowable estate deductions for that year
• Allowable deductions include interest paid by personal representatives, annual payments properly payable from residue, estate management expenses properly chargeable to income, and any excess deductions carried forward from the previous year
• A deduction cannot be claimed if it has already been taken into account in calculating the estate's aggregate income, and no sum may be counted twice as a deduction
• Where allowable deductions exceed the estate's aggregate income in a tax year, the surplus carries forward as excess deductions to the following year