Commentary on Sections Overview Overview Section 943: Calculation of trustees’ income pool
2879.This section prescribes the method of calculating the “income pool”, which is to be applied in any tax year in which the grossed-up amounts treated as paid to unit holders by the trustees exceed their modified net income. It is based on section 469(5C) of ICTA.
2880.An income pool consists of a running total of the amount by which, taking one tax year with another, the trustees’ modified net income has exceeded the grossed-up amounts treated as paid by them. In each tax year when this has occurred, the amount of any such excess is to be calculated. And if in any tax year the amounts treated as paid exceed the modified net income, any such excess must be deducted from the income pool.
2881.So the income pool as at the start of any tax year (“the current tax year”) is calculated according to whether in the previous tax year the trustees’ modified net income exceeded the amounts treated as paid (Case 1), was less than them (Case 2) or equalled them (Case 3).
2882.The amount so calculated is available to set against any excess of payments treated as made over modified net income in the current tax year.
2883.Subsections (2) and (3) deal with cases where the UUT trustees have been non-UK resident. For any year of non-residence there may be modified net income, but there is no adjustment to the income pool.
2884.Subsection (3) also provides that the income pool is nil as at the start of the tax year in which a UUT is established.