Commentary on Sections Overview Overview Section 480: Meaning of “accumulated or discretionary income”
1393.This section defines “accumulated or discretionary income”. It is based on section 686(2), (6ZA), (6ZB) and (6A) of ICTA.
1394.“Accumulated or discretionary income” is a single concept rather than the sum of two separate elements.
1395.Subsection (2) is based on section 686(2)(a) of ICTA. This provision spells out the nature and extent of the discretion concerned in more detail than in the source legislation.
1396.Income is not included within “accumulated or discretionary income” simply because trustees have discretion over what expenses to incur or how those expenses are to be charged.
1397.Subsection (3)(a) excludes from the meaning of “accumulated or discretionary income” any income to which a beneficiary is entitled as it arises. This is the case where a beneficiary has an interest in possession.
1398.Subsection (3)(b) and subsection (4) exclude income that arises to certain pension funds, provided that the property giving rise to the income is not held as a member of a property investment LLP (see the definition in section 1004).
1399.Subsection (3)(c) and subsections (5) and (6) exclude income from service charges held on trust by certain bodies.