Accumulating income

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance

Accumulating income

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
imgtext

This guidance note considers the trustees power to accumulate income and what accumulation period applies. It also considers the distinction between accumulated and undistributed income and when income becomes accumulated.

This guidance note deals with the position in England and Wales only. See Simon’s Taxes I5.8 for details of the provisions affecting Scotland and Northern Ireland.

This guidance note is necessarily simplified to include the key points for the accountant or tax adviser. It is not targeted at lawyers.

Power to accumulate income

The investments of a trust are likely to produce income. The trust deed will detail how the income should be dealt with by the trustees. This may be due to the beneficiaries as of right where they have an interest in possession, distributed to beneficiaries at the discretion of the trustees or where not distributed to the beneficiaries there may be a direction or an option to accumulate the income. ‘Accumulating the income’ means saving or reinvesting the income instead of paying it out to beneficiaries as it arises. It is then added

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+™
Powered by Tolley+

Popular Articles

Premiums on the grant or surrender of a lease

Premiums on the grant or surrender of a leasePremiums on the grant of a lease ― outlineWhen a property investor grants a lease, potentially this could be done on the basis that the tenant pays a premium for the initial grant of the lease, in addition to also paying rent over the term of the lease.

14 Jul 2020 12:58 | Produced by Tolley in association with Rob Durrant-Walker of Crane Dale Tax, part of AMS Group Read more Read more

Qualifying charitable donations

Qualifying charitable donationsCompanies can obtain corporation tax relief for qualifying payments or certain transfers of assets to charity under the qualifying charitable donations regime. Definition of qualifying charitable donationThe definition of ‘qualifying charitable donations’

14 Jul 2020 13:03 | Produced by Tolley Read more Read more

Non-business expenses

Non-business expensesIntroductionIn order for an expense to be tax deductible it must be incurred because of an employee’s employment. Any non-business related expense is, therefore, not relievable except in some very particular circumstances.This guidance note deals with three separate issues. The

14 Jul 2020 12:16 | Produced by Tolley Read more Read more