Revenue Note for Guidance
This section sets out how the residuary income of an estate is determined for the purposes of section 801.
(1) The residuary income of an estate for any year of assessment is the aggregate income of the estate for that year reduced by —
(2) The “benefits received” by a residuary beneficiary in respect of an absolute interest in the residue mean the total of all sums paid (either before the completion of the administration period or on completion of that period) less income tax deducted at the standard rate. In the case of a foreign estate, the benefits received is the amount of such sums without deduction of income tax. Where the benefits or advances made to a beneficiary in respect of his/her share in the residue during the course of the administration exceed the amount of the total of the residuary income at the completion of the administration period, the beneficiary’s residuary income is proportionately adjusted for the tax years of the administration period.
(3) If a beneficiary, other than the ultimate beneficiary at the close of the administration period, had an interest in the residue during the administration period, the residuary income of both beneficiaries is aggregated together to see whether an apportionment as set out in subsection (2) above is needed.
Relevant Date: Finance Act 2019