Corporation Tax Act 2009 section 962A

Income from which sums within section 951(1)(b) are treated as paid

Section 962A establishes the rules for identifying which part of an estate's aggregate income is treated as the source of payments made to corporate beneficiaries under the residuary income provisions.

• Where multiple persons hold absolute interests in the residue, the estate's aggregate income is apportioned between them on a just and reasonable basis (Assumption A).
• Payments are then treated as coming first from income bearing income tax at the highest rate, working down to the lowest rate (Assumption B), with a special ordering rule for different types of income taxed at 0%.
• Where the estate has a mix of income within and outside section 963, payments are treated as made from non-section 963 income first (Assumption C), before the other assumptions are applied.
• After Assumption C has been applied, Assumptions A and B are used in sequence — first to allocate among the non-section 963 income, and then to allocate among the section 963 income.