Section 935: Absolute, limited and discretionary interests
2356.This section defines the three types of interest in the whole or part of the residue of an estate. It is based on sections 698(1) and (3) and 701(2) and (3) of ICTA. The corresponding rule for income tax is in section 650 of ITTOIA.
2357.Subsections (1)(b) and 2(b) reflect the fact that the amount of any residue, and the income from it, can only be an estimate until the residue has been ascertained.
2358.Subsection (4) covers the following four situations:
where income/capital is properly payable directly to the person with the interest;
where income/capital is properly payable to the person with the interest indirectly through a trustee or other person;
where income/capital is properly payable for the benefit of the person with the interest, to another person, and that income/capital is paid directly to that other person; and
where income/capital is properly payable to a person where that person is a personal representative and subsection (5) applies.
2359.Subsection (5) deals with the situation where personal representatives would have an absolute or limited interest in the residue of another deceased person’s estate if a right they have as personal representatives were vested in them for their own benefit. In these circumstances they are treated as having that interest. The term “personal representatives” is defined in section 968. The definition corresponds with that in section 989 of ITA.
