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

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

Autumn Budget 2024

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

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

Autumn Budget 2024

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 have

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

Popular Articles

Employment Tax

Fuel-related payments / mileage payments

Fuel-related payments / mileage paymentsIntroductionMost employers will make payments to employees in relation to business travel. Among the most common payments in relation to business travel are fuel and mileage payments. If an employer does not reimburse these amounts, then the employee will be

14 Jul 2020 11:46 | Produced by Tolley in association with Philip Rutherford Read more

Trusts and Inheritance Tax

Holdover relief for disposals by trustees

Holdover relief for disposals by trusteesOverviewWhere a capital gain has been realised on an asset that has been disposed of and that disposal was not for full value (that is not in an arm’s length sale) then holdover relief may be available. This will happen when trustees appoint capital assets

14 Jul 2020 11:54 | Produced by Tolley Read more

Corporation Tax

Temporary differences

Temporary differencesCalculation of temporary differencesThe temporary difference arising in respect of an asset or liability is calculated by comparing the carrying value of that asset or liability with its tax base.IAS 12 uses the concept of taxable or deductible temporary differences. Whether a

14 Jul 2020 13:49 | Produced by Tolley in association with Malcolm Greenbaum Read more

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