Commentary on Sections Overview Overview Section 479: Trustees’ accumulated or discretionary income to be charged at special rates
1389.This section applies one of two special trust rates to trustees’ accumulated or discretionary income. It is based on section 686(1), (1AA), (2) and (5A) of ICTA.
1390.The special rates apply to the trustees even where the receipt will be taxed as the income of the settlor. The settlor will receive credit for the full amount of tax paid by the trustees.
1391.Subsection (1) introduces the term “accumulated or discretionary income” which is defined in section 480. The fact that this section does not apply to charitable trusts is given greater prominence than in the source legislation.
1392.Subsections (2) to (4) provide that accumulated or discretionary income is charged at either the dividend trust rate or the trust rate instead of the rates that would otherwise apply to that income.