Part 9Special rules about settlements and trustees
Chapter 7Discretionary payments
C1494Grossing up of discretionary payment and payment of income tax
1
The discretionary payment is treated as if it were made after the deduction of a sum representing income tax at the trust rate on the grossed up amount of the discretionary payment.
2
The grossed up amount of the discretionary payment is the actual amount of the discretionary payment grossed up by reference to the trust rate.
3
The person mentioned in subsection (4) is treated as having paid income tax of an amount equal to the sum deducted as mentioned in subsection (1).
4
That person is—
a
if condition A in section 493 is met, the beneficiary, and
b
if condition B in section 493 is met, the settlor.