Finance Act, 1976

Surcharge on certain income of trustees.

13.—(1) This section applies to income arising to trustees in any year of assessment so far as it—

(a) is income which is to be accumulated or which is payable at the discretion of the trustees or any other person, whether or not the trustees have power to accumulate it;

(b) is neither, before being distributed, the income of any person other than the trustees nor treated for any of the purposes of the Income Tax Acts as the income of a settlor;

(c) is not income arising under a trust established for charitable purposes only or income from investments, deposits or other property held for the purposes of a fund or scheme established for the sole purpose of providing relevant benefits within the meaning of section 13 of the Finance Act, 1972 ;

(d) exceeds the income applied in defraying the expenses of the trustees in that year which are properly chargeable to income, or would be so chargeable but for any express provisions of the trust; and

(e) is not distributed to one or more persons within that year of assessment or within eighteen months after the end of that year of assessment in such circumstances that the income distributed falls to be treated for the purposes of the Income Tax Acts as the income of the person or persons to whom it is distributed.

(2) (a) Income to which this section applies shall, in addition to being chargeable to income tax at the standard rate for the year of assessment for which it is so chargeable, be charged for that year to an additional duty of income tax (hereinafter referred to as “a surcharge”) at the rate of 20 per cent.

(b) Subject to subsection (3), the provisions of the Income Tax Acts shall apply in relation to a surcharge made under this section as they apply to income tax charged otherwise than by virtue of this section.

(3) Where income in respect of which a surcharge is made is distributed, no relief from or repayment in respect of the surcharge shall be allowed or made to the person to whom the income is distributed.

(4) (a) In this section “trustees” does not include personal representatives within the meaning of section 450 (2) of the Income Tax Act, 1967 , but where personal representatives within the meaning of that section, on or before the completion of the administration of the estate of a deceased person, pay to trustees any sum representing income which, if the personal representatives were trustees within the meaning of this section, would be income to which this section applies, that sum shall be deemed to be paid to the trustees as income and to have borne income tax at the standard rate.

(b) This subsection shall be construed together with Part XXIX of the Income Tax Act, 1967 .

(5) A notice given to trustees under any of the provisions specified in column 1 or 2 of Schedule 15 to the Income Tax Act, 1967 , may require that a return of the income arising to them is to include particulars of the manner in which the income has been applied, including particulars as to the exercise by them of any discretion and of the persons in whose favour it has been so exercised.