Part 5Miscellaneous income
Chapter 6Beneficiaries' income from estates in administration
Special rules for successive interests
674Successive interests: holders of limited interests
1
This section applies if—
a
two or more interests in the whole or part of the residue of an estate are held successively during the administration period by different persons,
b
the earlier or, if there are more than two, the earliest of the interests is a limited interest, and
c
each later interest arises or is created on the cessation of the previous interest otherwise than by death.
2
Income is treated as arising from a limited interest in the whole or part of the residue of the estate in a tax year in cases A, B and C.
3
Case A is where—
a
one of the successive interests subsists at the beginning of the tax year,
b
a sum is paid in respect of one of the interests in that year and before the end of the administration period, and
c
a person who has or has had one of the interests which is a limited interest (“a limited holder”) is entitled to receive the payment.
4
Case B is where—
a
the tax year is the final tax year,
b
one of the successive interests subsists at the beginning of that year,
c
a sum remains payable in respect of one of the interests at the end of the administration period, and
d
a limited holder is entitled to receive the payment.
5
Case C is where—
a
the tax year is a year before the final tax year,
b
the last of the successive interests ceases in the tax year,
c
a sum is either—
i
paid in respect of one of the interests in a later tax year but before the end of the administration period, or
ii
remains payable in respect of it at the end of that period, and
d
a limited holder is entitled to receive the payment.