Commentary on Sections Part 10: Miscellaneous income Overview Section 947: Aggregate income of the estate
2380.This section explains what is meant by the “aggregate income of the estate” for a tax year. It is an important definition of general application. It is based on sections 701(5) and (8) and 702 of ICTA. The corresponding rule for income tax is in section 664 of ITTOIA.
2381.Subsection (2) defines the income and amounts within the aggregate income of the estate. Subsection (2)(b) brings in foreign source income and subsection (4) provides that such income takes account of any deductions which would have been available if it had been subject to United Kingdom income tax. So subsection (4) brings foreign source income into line with United Kingdom source income.
2382.Subsection (5) provides that two types of income are excluded from the aggregate income of the estate. The exclusion detailed in subsection (5)(a) concerning income to which any person may become entitled under a specific disposition is new to the definition of the aggregate income of the estate although it is similar to section 697(1)(b) of ICTA which deals with amounts which are deductible from the aggregate income in calculating the residuary income of the estate.
2383.It is not considered appropriate for income from specific dispositions or income from contingent interests to be treated as part of the aggregate income of the estate. See Change 70 in Annex 1.
2384.Section 698(1) of ICTA in part deals with the position where the deceased person (“A”), whose estate is being administered by personal representatives, had an absolute or limited interest in the residue of the estate of another deceased person (“B”). Section 698(1) of ICTA deems the personal representatives to have the same interest as “A” “notwithstanding that that right is not vested in them for their own benefit”. The substance of this is rewritten in section 935(5). Section 698(1) of ICTA also deems any income in respect of such an interest to be part of the aggregate income of A’s estate. This part of the source legislation is not rewritten because such income will fall within the definition of the aggregate income of the estate anyway, once the personal representatives are deemed to have the interest, because it will be the income of the deceased’s personal representatives as such. It is immaterial for this purpose that that right in relation to the estate of another deceased person “is not vested in them for their own benefit”.
2385.It is not necessary to expand on the two types of excluded income mentioned in subsection (5) of this section (with the exception of subsection (6) of this section) since it will be clear when such income arises. Consequently, section 701(6) and (7) of ICTA (which provide the meaning for “charges on residue”) are not rewritten.