Taxation of trusts—income tax and capital gains tax

Q&As

15 years ago, a remainderman of a trust (holding several units in an Open-Ended Investment Company (OEIC)), which was settled by a non-domiciled non-resident settlor (now deceased) and subject to a qualifying interest in possession, became resident in the UK, at which point the trustees began to keep a record of gains and losses. The life tenant has since died and the remainderman has become domiciled in the UK. How should the remainderman report his receipt of 50% of the trust assets to HMRC for matching purposes?

15 years ago, a remainderman of a trust (holding several units in an Open-Ended Investment Company (OEIC)), which was settled by a non-domiciled...

20th Sep

Q&As

A non-resident trustee disposes of a UK residential property in the tax year 2017/18. The trust was settled by a UK domiciled settlor in 2002. How would any gains arising from the disposal be taxed?

A non-resident trustee disposes of a UK residential property in the tax year 2017/18. The trust was settled by a UK domiciled settlor in 2002. How...

6th Sep

Practice notes

Trust Registration Service (TRS)

Trust Registration Service (TRS)Background to the Trust Registration Service (TRS)HMRC's online Trust Registration Service (TRS) was designed to...

3rd Sep

Practice notes

CGT—basic principles for trusts

CGT—basic principles for trustsGeneral principlesFor capital gains tax (CGT) purposes, trustees are treated as a single chargeable person in their own...

Produced in partnership with Paul Davies of Clarke Willmott 25th Aug

Q&As

Is any existing balance of the tax pool lost when a discretionary settlement becomes settlor interested (in the same way as when the trustees appoint an interest in possession in respect of all the trust income), or if the settlement subsequently ceases to be settlor interested, can the tax pool (which was built up prior to the settlement becoming settlor interested) be revived?

Is any existing balance of the tax pool lost when a discretionary settlement becomes settlor interested (in the same way as when the trustees appoint...

23rd Aug

Q&As

What authority is there regarding HMRC's right to challenge figures submitted to them in a trust tax return?

What authority is there regarding HMRC's right to challenge figures submitted to them in a trust tax return?HMRC’s powers of enquiry and information...

19th Aug

Q&As

Where the Will is silent as to the responsibility of upkeep and repair of the trust property, who is responsible for payment? Is it payable by the life tenant (either out of their own funds or trust income), or the trustees from the capital of the remaining trust assets, or a mixture of both?

Where the Will is silent as to the responsibility of upkeep and repair of the trust property, who is responsible for payment? Is it payable by the...

17th Aug

Q&As

What are the CGT and SDLT implications of a bare trustee (mother) transferring the entire trust property comprising a number of residential properties into the name of the sole beneficiary (her son) for nil consideration?

What are the CGT and SDLT implications of a bare trustee (mother) transferring the entire trust property comprising a number of residential properties...

16th Aug

Practice notes

Dealing in property or property investment?

Dealing in property or property investment?Whether a property transaction is an investment or trading (ie dealing) activity is of key importance to...

16th Aug

Q&As

Where a ‘qualifying annual payment’ is made by a UK company to UK corporate trustees of a discretionary trust, can the UK company payer rely on the exemption from UK withholding tax in section 933 of the Income Tax Act 2007? Is that payment made ‘by or through’ the trustees for the purposes of withholding tax?

Where a ‘qualifying annual payment’ is made by a UK company to UK corporate trustees of a discretionary trust, can the UK company payer rely on the...

16th Aug

Practice notes

Interest in possession trusts—income tax

Interest in possession trusts—income taxThe trustees are together treated as if they were a single person (distinct from the individuals who are the...

Produced in partnership with Paul Davies of Clarke Willmott 16th Aug

Practice notes

Taxation of trusts for disabled persons—vulnerable person election

Taxation of trusts for disabled persons—vulnerable person electionFor general guidance on the special income tax and capital gains tax (CGT) treatment...

Produced in partnership with Phillipa Bruce-Kerr of Harrison Clark Rickerbys and Lynne Bradey of Wrigleys Solicitors LLP 16th Aug

Practice notes

Taxation of trusts—restructuring trusts

Taxation of trusts—restructuring trustsReasons for restructuring a trustRestructuring a trust may be undertaken for a number of purposes, including...

Produced in partnership with Paul Davies of Clarke Willmott 16th Aug

Practice notes

Taxation of trusts—capital losses

Taxation of trusts—capital lossesCapital losses arising to trustees are calculated in the same way as they are for individuals (for further guidance...

Produced in partnership with Paul Davies of Clarke Willmott 16th Aug

Practice notes

Taxation of trusts—sub-funds

Taxation of trusts—sub-fundsA ‘sub-fund’ of a trust is said to exist when a specific asset (or specific assets) of the trust are held subject to...

Produced in partnership with Paul Davies of Clarke Willmott 16th Aug

Practice notes

Discretionary trust beneficiaries—income tax

Discretionary trust beneficiaries—income taxThis Practice Note deals with the main principles of income tax that apply to the beneficiary of a...

Produced in partnership with Paul Davies of Clarke Willmott 16th Aug

Practice notes

Taxation of trusts—CGT reliefs for business assets

Taxation of trusts—CGT reliefs for business assetsThe purpose of this Practice Note is to set out an overview of the key capital gains tax (CGT)...

Produced in partnership with Paul Davies of Clarke Willmott 16th Aug

Practice notes

CGT—PPR relief for trusts and estates

CGT—PPR relief for trusts and estatesFORTHCOMING CHANGE: On 14 July 2020, the Office of Tax Simplification (OTS) published its online survey and a...

16th Aug

Practice notes

Interest in possession beneficiaries (life tenants)—income tax

Interest in possession beneficiaries (life tenants)—income taxBroadly speaking, a life tenant is entitled to receive the income from an interest in...

Produced in partnership with Jordan Ellis of Trowers & Hamlins 16th Aug

Practice notes

Bare trusts—income tax and CGT

Bare trusts—income tax and CGTThis Practice Note explains how trustees of bare trusts are treated for income tax and capital gains tax (CGT) purposes....

Produced in partnership with Paul Davies of Clarke Willmott 16th Aug

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