What does section 675 of ITTOIA 2005 do?

Section 675 provides the rule for calculating the basic amount of estate income for a beneficiary who holds a successive limited interest in an estate under administration. The basic amount is found by totalling the relevant sums identified under section 674 that fall within the tax year in question.

Which sums are added together to calculate the basic amount under section 675?

The basic amount is the total of relevant sums arising under section 674(3)(b), section 674(4)(c), and section 674(5)(c). However, sums under section 674(4)(c) and section 674(5)(c) cannot both arise in the same tax year, so in practice at most two of the three components will apply in any given year.

How does section 675 relate to section 661 of ITTOIA 2005?

Section 675 is the counterpart to section 661. While section 661 calculates the basic amount of estate income for ordinary (non-successive) limited interests, section 675 mirrors those rules but applies specifically to successive limited interests, which are limited interests following on from an earlier interest in the same estate.

Can sums under section 674(4)(c) and section 674(5)(c) arise in the same tax year?

No. It is not possible for sums under both section 674(4)(c) and section 674(5)(c) to arise in the same tax year. This means the basic amount calculation for any given year will involve at most two of the three components identified under section 674, simplifying the computation for beneficiaries.

Income Tax (Trading and Other Income) Act 2005 section 675

Basic amount of estate income: successive limited interests

Section 675 explains how to calculate the basic amount of estate income for a beneficiary who holds a successive limited interest in an estate that is being administered.

This section applies specifically to successive limited interests, mirroring the rules in section 661 that apply to ordinary (non-successive) limited interests.
The basic amount of estate income for a tax year is found by adding together all the relevant sums identified under section 674 that fall within that tax year.
The relevant sums are those arising under section 674(3)(b), section 674(4)(c), and section 674(5)(c).
It is not possible for sums under both section 674(4)(c) and section 674(5)(c) to arise in the same tax year, so in practice only two of the three components can apply in any given year.

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