Income Tax (Trading and Other Income) Act 2005 section 679A

Income from which sums within section 668(1)(b) are treated as paid

Section 679A sets out the rules for determining which parts of an estate's aggregate income are treated as the source of payments made to beneficiaries under section 668(1)(b), using a series of assumptions applied in a specified order.

• Three assumptions (A, B and C) are applied in a prescribed order to identify which types of estate income are treated as the source of payments to beneficiaries
• Assumption A requires a just and reasonable apportionment of the estate's total income where multiple persons hold absolute interests in the residue
• Assumption B treats payments as coming first from income taxed at the highest rate and working downwards, with a special ordering rule where income is taxed at 0% under section 680(1A)
• Assumption C applies where only some of the estate income falls within section 680, requiring the basic amount to be paid first from income outside that section before income within it