Tax on UK resident beneficiaries of non-resident trusts ― overview

Copyright © 2026 LexisNexis
Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance

Tax on UK resident beneficiaries of non-resident trusts ― overview

Copyright © 2026 LexisNexis
Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
imgtext

This guidance note outlines the UK tax treatment of UK resident beneficiaries of non-resident trusts. It considers how to identify whether a distribution is of income and capital and where it is income, how the different types of interest are treated. It outlines how the transfer of assets abroad code applies and how capital gains of the trust could be attributed to a beneficiary under TCGA 1992, s 87. It also outlines the changes made from 6 April 2025 and directs the reader to more detailed guidance.

Introduction

UK resident beneficiaries of non-resident trusts are subject to UK tax on payments or benefits received from the trust. They are liable for income tax on income distributions from the trust and they may also be liable to income tax or capital gains tax on payments of capital from the trust.

In contrast to UK settlors of non-resident trusts, the liability of beneficiaries is determined by the extent of their entitlement or the amounts actually paid to them. They

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
TAKE A FREE TRIAL NOW
Powered by Tolley+™
  • 04 Aug 2025 14:00

Home/ Tolley Tax Guidance/ Trusts and Inheritance Tax / Advising on offshore matters

Popular Articles

Personal Tax

Simple assessments

Simple assessmentsFrom 2016/17 onwards, HMRC has the power to make a ‘simple assessment’ of the taxpayer’s income tax and / or capital gains tax liability outside of the self assessment system. As HMRC already receives significant amounts of information on the income received and tax paid by

14 Jul 2020 13:40 | Produced by Tolley Read more Read more
Personal Tax

Self assessment ― amendments and corrections

Self assessment ― amendments and correctionsOnce a self assessment tax return has been filed, both HMRC and the taxpayer (or the agent) has the right to make changes to the return. There are different time limits depending on whether it is a correction by HMRC or an amendment made by the

14 Jul 2020 13:37 | Produced by Tolley Read more Read more
Corporation Tax

Withholding tax

Withholding taxIntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeUK withholding tax may be reduced under the provisions of a double tax treaty (DTT). Prior to 1 June 2021, payments of interest and royalties made to EU resident associated companies were

14 Jul 2020 14:01 | Produced by Tolley Read more Read more