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HMRC internal manual

Trusts, Settlements and Estates Manual

Legal background to trusts and estates: apportioning income

The deceased’s investments will continue producing income after death. The executors must decide whether what they have received is

  • income which belonged to the deceased, or
  • income which arose after the death.

The Apportionment Act 1870 provides rules for making this decision although modern trusts and wills may exclude the Act’s provisions. The terms of the deceased’s will may also set aside the provisions of the Apportionment Act, or may substitute different ways of apportioning income.

If the personal representative makes any reference to the Apportionment Act 1870, refer the case to HMRC Trusts & Estates Technical Edinburgh for advice.

For inheritance tax purposes, periodic payments, in the nature of income, accrue from day to day. For income tax purposes, income arises when it becomes due and payable.