Commentary on Sections Part 10: Miscellaneous income Overview Section 937: Absolute interests in residue
2361.This section sets out the basis on which estate income is treated as arising in an accounting period in the case of absolute interests in residue. It is based on section 696(3) and (5) of ICTA. The corresponding rule for income tax is in section 652 of ITTOIA.
2362.Subsections (2) and (3) set out the relevant conditions. A payment need not be made in the “final accounting period” because the net amount of estate income in that period is always equal to the assumed income entitlement for that period. Under section 696(5) of ICTA, taxing a company with an absolute interest in a residuary estate depends on whether the company receives payments and, in the final year of administration, on a fictional payment under that section. The same effect is achieved in this section by determining the liability by considering the assumed income entitlement in all accounting periods. Assumed income entitlement is dealt with in section 948.