Section 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 the estate is a UK estate, by the applicable rate (see subsections (5A) to (5C)).^F1

(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.

(5A)The applicable rate by reference to which a sum within subsection (1)(b) is grossed up depends on the rate at which income tax was borne by the parts of the aggregate income of the estate from which section 962A treats the sum as having been paid.^F2

(5B)If the same rate was borne by all the income from which section 962A treats the sum as having been paid, the applicable rate is that rate.^F2

(5C)If different rates were borne by different parts of the income from which section 962A treats the sum as having been paid, each of those rates is the applicable rate by reference to which the corresponding part of the sum is grossed up.^F2

(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).