Trustees ― payment of income and capital gains tax

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

Trustees ― payment of income and capital gains tax

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

This guidance note considers how and when trustees pay income tax and capital gains tax (CGT).

Income and CGT are paid by trustees in a number of ways. These are:

  1. •

    collection at source throughout the year

  2. •

    payments on account calculated by reference to the tax due for the previous tax year

  3. •

    balancing payments for the tax year (tax liability less tax already deducted at source or paid on account)

Payments on account ― income tax

Payments on account are required where:

  1. •

    the amount payable at the end of the previous year was more than £1,000, and

  2. •

    the amount collected at source was less than 80% of the total income tax liability

TMA 1970, s 59A(1); SI 1996/1654

Each payment on account is 50% of the previous tax year’s tax liability, less the tax collected at source.

Payments on account do not cover CGT as capital gains are unlikely to remain at the same level year on year; whereas it is

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+™
  • 17 Nov 2025 11:10

Home/ Tolley Tax Guidance/ Trusts and Inheritance Tax / Compliance for trusts and estates

Popular Articles

Foreign self-employment

Foreign self-employmentTrading in another jurisdiction involves many issues, only some of which involve taxation. Advice should be taken, not only in relation to tax but on the wider business implications. For an overview of the points to consider for certain jurisdictions see Tolley's Global

Read more Read more

Exemption ― insurance ― overview

Exemption ― insurance ― overviewThis guidance note provides an overview of the VAT treatment of insurance products and should be read in conjunction with the Insurance ― specific transactions and Exemption ― insurance ― brokers and agents guidance notes.Is insurance exempt from VAT?Supplies of

Read more Read more

Interest on late paid tax

Interest on late paid taxIntroductionInterest on late paid tax is a compulsory charge set out in legislation to reflect the interest which would have accrued to the Exchequer had the correct amount of tax been paid at the right time.Harmonised legislation was introduced in 2009 to:•set statutory

Read more Read more