Income Tax (Trading and Other Income) Act 2005 section 684

Income charged

Section 684 establishes that the full amount of annual payments arising in a tax year is subject to income tax, with modifications for foreign income and discretionary trust payments.

• The full amount of annual payments arising in the tax year is chargeable to income tax
• Special rules apply where the annual payments constitute foreign income, including possible deductions and the remittance basis
• Where trustees make payments in the exercise of a discretion, the taxable amount is modified by grossing-up rules
• The grossing-up rules for discretionary trust payments are set out separately in the Income Tax Act 2007