581. Trustees' expenses and special rates for trustees.

If the trustees of a settlement1 incur allowable expenses in a tax year2, those expenses are to be set against the trustees' trust rate income3 for the current tax year, before applying the provisions4 as to the trustees' first slice of trust income5. Expenses are allowable for this purpose only so far as: (1) they are expenses of the trustees; and (2) they are properly chargeable to income, ignoring the express terms of the settlement6. Only expenses incurred exclusively for the benefit of the income beneficiaries may be charged against income7.

Trustees who incurred an allowable expense in a tax