3326.This new section is based on section 698A of ICTA. It ensures that payments by personal representatives to beneficiaries out of income retain the character of the underlying income. The opportunity has been taken to clarify a point of doubt in the source legislation. See Change 162 in Annex 1.
3327.It may be noted that section 698A(1) and (2) of ICTA apply only where income is treated under “this Part” in a particular way. In fact, following ITTOIA, the income tax cases to which “this Part” previously applied are now in Chapter 6 of Part 5 of ITTOIA. But paragraph 5 of Schedule 2 to ITTOIA enables the reference to “this Part” to be read as embracing the ITTOIA provisions now in Chapter 6 of Part 5 of ITTOIA.