Finance Act 1974

Estates of deceased persons in course of administration

9 (1) Where a development gain has accrued to the personal representatives of a deceased person as such during the administration period, Part XV of the Taxes Act (estates of deceased persons in course of administration) shall have effect subject to the following provisions of this paragraph.

(2) For the purposes of section 426(5) of the Taxes Act (relief from tax on deemed income in respect of a limited interest in a foreign estate)—

(a) any income arising to the personal representatives of a deceased person as such by virtue of section 38(2) of this Act (development gains) shall be treated as not forming part of the aggregate income of the estate in question ; and

(b) any United Kingdom income tax borne by any such income shall be left out of account.

(3) Section 427 of the Taxes Act (absolute interests in residue) shall have effect as if—

(a) for subsection (3)(a) there were substituted—

“(a) in the case of a United Kingdom estate—

(i) in the first instance, as regards so much of his residuary income for that year as has borne income tax at the basic rate for that year, that much of that income less income tax at that rate, and

(ii) subject to the preceding sub-paragraph, as regards so much of his residuary income for that year as has borne income tax at a rate equal to the sum of the basic rate and the additional rate for that year, that much of that income less income tax at the sum of those rates,

and”;

(b) in subsection (3), as amended by paragraph 53(b) of Schedule 6 to the [1971 c. 68.] Finance Act 1971, there were added at the end the words " or, where appropriate, at a rate equal to the sum of the basic rate and the additional rate "; and

(c) in subsection (4)(a), as amended by paragraph 53(c) of the said Schedule 6, after the words " the basic rate" there were inserted the words " or, in so far as it has borne income tax at a rate equal to the sum of the basic rate and the additional rate,-at a rate equal to the sum of those rates ".

(4) Section 429 of the Taxes Act (special provisions as to certain interests in residue) shall have effect as if in subsection (2)(a), as amended by paragraph 55 of the said Schedule 6, after the words " the basic rate " there were inserted the words " or, in so far as it has borne income tax at a rate equal to the sum of the basic rate and the additional rate, at the sum of those rates ".

(5) This paragraph shall be construed as one with Part XV of the Taxes Act; and in sections 427 and 429 of that Act, as they have effect by virtue of this paragraph, " the additional rate " means the additional rate mentioned in section 32(1) of the Finance Act 1971 or, if more than one, the higher or highest of them.