{
  "url": "https://openlegislation.uk/income-tax-trading-and-other-income-act-2005/section-636",
  "json_url": "https://openlegislation.uk/income-tax-trading-and-other-income-act-2005/section-636.json",
  "legislation": "ukpga/2005/5",
  "legislation_title": "Income Tax (Trading and Other Income) Act 2005",
  "legislation_url": "https://openlegislation.uk/income-tax-trading-and-other-income-act-2005",
  "path": "section/636",
  "kind": "section",
  "number": "636",
  "heading": "Calculation of undistributed income",
  "text": "(1) For the purposes of section 635, ... income arising under a settlement in any tax year is treated as ... income which has not been distributed so far as it exceeds the total amount of—\n(a) the sums to which subsection (2) applies,\n(b) the expenses to which subsection (4) applies, and\n(c) if the trustees of the settlement are trustees for charitable purposes, the amount to which subsection (6) applies.\n(2) This subsection applies to ... sums paid in the tax year to any persons by the trustees of the settlement that are payments of ... income, or sums treated as representing ... income, and that—\n(a) are treated in that year (otherwise than under section 633) as the income of those persons for income tax purposes, or\n(b) would be treated as mentioned in paragraph (a) if those persons were ... resident in the United Kingdom and the sums had been paid to them there.\n(3) Subsection (2) is subject to section 637(1).\n(4) This subsection applies to any expenses of the trustees of the settlement paid in the tax year which, in the absence of any express provision of the settlement, would be properly chargeable to ... income.\n(5) Subsection (4)—\n(a) does not apply to expenses so far as they are included in the sums mentioned in subsection (2), and\n(b) is subject to section 637(2) to (7).\n(6) This subsection applies to the amount by which—\nA>Bwhere—\nA is any ... income arising under the settlement in the tax year in respect of which exemption from tax may be granted under any provision to which subsection (7) applies, and\nB is the total amount of any such sums or expenses as are mentioned in subsections (2) and (4) paid in that year which are properly chargeable to the income.\n(7) This subsection applies to the following provisions of ITA 2007—\nsection 521(4) (gifts entitling donor to gift-aid relief),\nsection 522(5) (gifts of money from companies),\nsection 523(5) (payments from other charities),\nsection 523A (legacies)\nsection 524 (profits etc of charitable trades),\nsection 529 (profits from fund-raising events),\nsection 530 (profits from lotteries),\nsection 531 (property income etc),\nsection 532 (savings and investment income),\nsection 533 (public revenue dividends),\nsection 536 (miscellaneous income), and\nsection 537 (income from estates in administration).",
  "extent": "E+W+S+N.I.",
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "F",
      "label": "F1",
      "text": "Word in s. 636(1) omitted (for the tax year 2025-26 and subsequent tax years) by virtue of Finance Act 2025 (c. 8), Sch. 12 paras. 9(a)(i), 70(1)"
    },
    {
      "type": "F",
      "label": "F2",
      "text": "Word in s. 636(2) omitted (with effect in accordance with Sch. 10 para. 21 of the amending Act) by virtue of Finance Act 2018 (c. 3), Sch. 10 para. 9(a)(i)"
    },
    {
      "type": "F",
      "label": "F3",
      "text": "Words in s. 636(2) substituted (with effect in accordance with Sch. 10 para. 21 of the amending Act) by Finance Act 2018 (c. 3), Sch. 10 para. 9(a)(ii)"
    },
    {
      "type": "F",
      "label": "F4",
      "text": "Word in s. 636(2) omitted (for the tax year 2025-26 and subsequent tax years) by virtue of Finance Act 2025 (c. 8), Sch. 12 paras. 9(a)(ii), 70(1)"
    },
    {
      "type": "F",
      "label": "F5",
      "text": "Words in s. 636(2)(b) substituted (with effect in accordance with Sch. 10 para. 21 of the amending Act) by Finance Act 2018 (c. 3), Sch. 10 para. 9(a)(iii)"
    },
    {
      "type": "F",
      "label": "F6",
      "text": "Words in s. 636(2)(b) omitted (for the tax year 2025-26 and subsequent tax years) by virtue of Finance Act 2025 (c. 8), Sch. 12 paras. 9(b), 70(1)"
    },
    {
      "type": "F",
      "label": "F7",
      "text": "Words in s. 636(2)(b) substituted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 48(1) (with Sch. 46 para. 48(2))"
    },
    {
      "type": "F",
      "label": "F8",
      "text": "Word in s. 636(4) omitted (for the tax year 2025-26 and subsequent tax years) by virtue of Finance Act 2025 (c. 8), Sch. 12 paras. 9(a)(iii), 70(1)"
    },
    {
      "type": "F",
      "label": "F9",
      "text": "Word in s. 636(6) omitted (for the tax year 2025-26 and subsequent tax years) by virtue of Finance Act 2025 (c. 8), Sch. 12 paras. 9(a)(iv), 70(1)"
    },
    {
      "type": "F",
      "label": "F10",
      "text": "Words in s. 636(6) substituted (with effect as stated in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1034, Sch. 1 para. 558(2) (with transitional provisions and savings in Sch. 2)"
    },
    {
      "type": "F",
      "label": "F11",
      "text": "S. 636(7) inserted (with effect as stated in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1034, Sch. 1 para. 558(3) (with transitional provisions and savings in Sch. 2)"
    },
    {
      "type": "F",
      "label": "F12",
      "text": "Words in s. 636(7) inserted (with effect in accordance with s. 54(10) of the amending Act) by Finance Act 2026 (c. 11), s. 54(5)(10)"
    }
  ],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/ukpga/2005/5/section/636",
    "retrieved_at": "2026-10-29T09:16:32.370392+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}