Income Tax (Trading and Other Income) Act 2005 section 681

Transfers of assets etc. treated as payments

Section 681 explains how transfers of assets, appropriations of assets by personal representatives, and the set-off or release of debts are treated as payments for the purposes of taxing estate income.

• When assets are transferred or personal representatives appropriate assets to themselves, this is treated as a payment equal to the market value of those assets at the date of transfer or appropriation.
• When a debt is set off or released, this is treated as a payment equal to the amount of the debt.
• If at the end of the administration period there is still an obligation to transfer assets, or personal representatives are entitled to appropriate assets to themselves, the value of those assets at that time is treated as payable.
• If at the end of the administration period there is still an obligation to release or set off a debt, or personal representatives are entitled to release or set off a debt in their own favour, a sum equal to the debt is treated as payable at that point.