Corporation Tax Act 2009

951 Reduction in share of residuary income of estate

(1) This section applies if a company has an absolute interest in the whole or part of the residue of an estate at the end of the administration period and—

(a) the total of the company’s shares of the residuary income of the estate in respect of that interest for all tax years (apart from this section), exceeds

(b) the total of all sums paid during or payable at the end of the administration period in respect of that interest to any person (grossed up where subsection (5) applies).

(2) In the final accounting period the company’s share of the residuary income of the estate is to be reduced by that excess.

(3) If that excess is greater than the company’s share of that income for the final accounting period, the company’s share of that income for the previous accounting period is to be reduced, and so on.

(4) If subsection (3) applies, all necessary adjustments and repayments of corporation tax are to be made.

(5) For the purposes of calculating the total mentioned in subsection (1)(b)—

(a) if the estate is a UK estate in relation to a tax year in which a sum is paid, the sum is to be grossed up by reference to the basic rate for that year, and

(b) if the estate is a UK estate in relation to the final tax year, a sum payable at the end of the administration period is to be grossed up by reference to the basic rate for that year.

(6) For the application of this section where two or more absolute interests in the whole or the same part of the residue are held successively by different persons, see section 954(5) and (6).