9Reduction of liability where tax paid

9 Reduction of liability where tax paid

(1) Where: (a) trust recoupment tax is or was payable on a secondary taxable amount and trust recoupment tax is payable on the primary taxable amount by reference to trust recoupment tax on which the secondary taxable amount was ascertained; and (b) an amount of trust recoupment tax on that primary taxable amount is paid; there shall be deemed to be applied, or to have been applied, in reduction of the trust recoupment tax that is or was payable on the secondary taxable amount, an amount equal to the amount paid as mentioned in paragraph (b). (2) Where: (a) trust recoupment tax is or was payable on a primary taxable amount and trust recoupment tax is payable on a secondary taxable amount ascertained by reference to trust recoupment tax on the primary taxable amount; and (b) an amount of trust recoupment tax on the secondary taxable amount is paid; an amount equal to the amount paid as mentioned in paragraph (b) shall be deemed to be applied, or to have been applied, in reduction of the trust recoupment tax that is or was payable on the primary taxable amount. (3) Where under this section an amount is deemed to be applied, or to have been applied, in reduction of the trust recoupment tax that is or was payable on a taxable amount, being trust recoupment tax that includes or included late payment tax, the amount shall, to the extent to which it does not exceed the amount of that late payment tax, be deemed to be applied, or to have been applied, in reduction of that late payment tax and the balance (if any) shall be deemed to be applied, or to have been applied, in reduction of the remaining trust recoupment tax. (4) In this section, trust recoupment tax includes late payment tax and penalty tax.