Commentary

I4.535 Computation of income of the estate for assessment purposes

IHT, trusts and estates

I4.535 Computation of income of the estate for assessment purposes

I4.535 Computation of income of the estate for assessment purposes

Income and outgoings covering a period including the date of death are apportionable between capital and income under the Apportionment Act 1870, unless the will provides that that Act shall not apply. However, for tax purposes, it is established by cases decided in the courts that income1 and outgoings2 accrued, but not payable, up to the date of death, are not included in the computation of the tax liability of the deceased and that such income is chargeable to tax on the personal representatives (so far as tax is not deducted at source)3.

PRs (see I4.530) are chargeable to income tax (see I4.534)4:

  1.  

    (a)     on dividend income at the dividend ordinary rate; and

  2.  

    (b)     on other income at the basic rate

See E1.101E regarding the structure of Scottish income tax rates.

PRs are not charged to tax at other rates, such as the higher rate5.

PRs are chargeable to income tax at the basic rate on a gain from a life assurance contract or a new

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