Income Tax (Trading and Other Income) Act 2005

568 Special rule for certain income of trustees

(1) This section applies if the profits or gains charged under this Chapter and arising to trustees do not meet any of conditions A to C.

(2) Condition A is that the profits or gains fall to be treated for income tax purposes as income of a settlor.

(3) Condition B is that the profits or gains arise under a trust established for charitable purposes.

(4) Condition C is that the profits or gains are from property held for the purposes of a superannuation fund to which section 615(3) of ICTA applies.

(5) The profits or gains are to be treated for income tax purposes as if they were income to which section 686 of ICTA applies (accumulation and discretionary trusts: special rates of tax).

(6) In this section “trustees” does not include personal representatives, but where, during or at the end of the administration period, personal representatives pay trustees any sum representing profits or gains to which this section would apply if the personal representatives were trustees, that sum is treated as—

(a) being paid as income, and

(b) having borne income tax at the applicable rate.

(7) In subsection (6)—

(a) “administration period” has the meaning given by section 653, and

(b) “the applicable rate” means the rate referred to in section 663(1) (the applicable rate for grossing up basic amounts of estate income).