Commentary on Sections Overview Overview Section 504: Treatment of income of unauthorised unit trust
1483.This section sets out the basis of the taxation of the trustees of a UUT. It is based on section 469(1), (2) to (2B) and (9) of ICTA.
1484.The taxable income of the trustees of a UUT is treated as that of the trustees rather than the unit holders (subsection (2)).
1485.All income of the trustees is to be charged at the basic rate (subsection (3)). The special trust rates do not apply (see subsection (4)(a) and section 481(1)(b)).
1486.Accordingly, certain sums that would ordinarily be treated as carrying a tax credit, or where the recipient is treated as having paid income tax, are not so treated if received by UUT trustees (subsection (4)(b) to (d)).
1487.Subsection (5) provides that annual payments to unit holders do not come within the special discretionary payments regime in section 494. The general provision for trustees to provide statements of tax deducted, in section 352 of ICTA, is rewritten in section 495. But the provisions concerning such statements by UUT trustees are in section 975 in Chapter 19 of Part 15, where they more naturally belong. So section 495 is also excluded by subsection (5).