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Legislation
Income Tax (Trading and Other Income) Act 2005

Crossheading Further provisions for calculating estate income relating to absolute interests

  • Section 665 Assumed income entitlement
  • Section 666 The residuary income of the estate
  • Section 667 Shares of residuary income of estate
  • Section 668 Reduction in share of residuary income of estate
  • Section 669 Reduction in residuary income: inheritance tax on accrued income
  • Section 670 Applicable rate for determining assumed income entitlement (UK estates)
  1. Further provisions for calculating estate income relating to absolute interests
  2. The residuary income of the estate

Section 666 | The residuary income of the estate

From legislation.gov.uk

(1)For the purposes of this Chapter the residuary income of an estate for a tax year is the aggregate income of the estate for that year, less the allowable estate deductions for that year.This is subject to section 669 (reduction in residuary income: inheritance tax on accrued income).

(2)The allowable estate deductions for a tax year are—

(a)all interest paid in that year by the personal representatives in that capacity (but see section 233 of IHTA 1984: exclusion of interest on unpaid inheritance tax),

(b)all annual payments for that year which are properly payable out of residue,

(c)all payments made in that year in respect of expenses incurred by the personal representatives in that capacity in the management of the assets of the estate, and

(d)any excess deductions from the previous tax year.

This is subject to subsections (3) to (5).

(3)No sum is to be treated as an allowable estate deduction if it is allowable in calculating the aggregate income of the estate.

(4)No sum is to be counted twice as an allowable estate deduction.

(5)Payments in respect of expenses are only allowable estate deductions if they are properly chargeable to income (ignoring any specific direction in a will).

(6)In this section “excess deductions from the previous tax year” means so much of the allowable deductions for the previous tax year as exceeded the aggregate income of the estate for that year.

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