Format for trust accounts

By Tolley
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The following Trusts and Inheritance Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Format for trust accounts
  • Synopsis
  • Balance sheet
  • Capital account
  • Income account
  • Beneficiaries' or accumulations account
  • Investment schedule
  • Other schedules and notes
  • Variations in format and layout
  • Accounting conventions

There is no mandatory format for trust accounts. The accountant may choose a layout to suit the complexity of the trust and the occasion. A major distribution of capital, or a revaluation, or a termination of the trust will require additional information. This guidance note describes the customary contents and structure of an annual set of trust accounts. A simple set of accounts is illustrated in Format for trust accounts - sample template.

Synopsis

It is often useful to prepare a synopsis, depending on the complexity of the trust provisions and depending on who the users of the accounts are likely to be. A synopsis summarises the objectives and terms of the trust. It will name the settlor, trustees and beneficiaries, together with advisers such as solicitors, investment managers and accountants. It is helpful if each annual set of accounts repeats relevant dates such as:

  • date of commencement
  • dates of entitlement or interest in possession for the beneficiaries
  • date when accumulations of income must end
Balance sheet

The balance sheet shows the financial position of the trust at the end of the accounting period, but is usually, by convention, included as the first page of the accounts. It shows:

  • the total value of the funds held on behalf of beneficiaries

    represented by:

  • total assets less total liabilities

Where beneficiaries have a fixed interest in the trust fund, they are usually named on the 'top half' of the balance sheet. With fully discretionary trusts, this section consists of the total value for capital and income.

Assets will consist principally of the trust's investments, property and

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