Trustees ― payment of income and capital gains tax

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

Trustees ― payment of income and capital gains tax

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+™
Powered by Tolley+

Popular Articles

Wholly and exclusively

Wholly and exclusivelyFor both income tax and corporation tax purposes, one of the fundamental conditions that must be satisfied for an item of expenditure to be deductible, is that it must incurred ‘wholly and exclusively’ for the purposes of the trade, profession or vocation. References to CTA

14 Jul 2020 14:00 | Produced by Tolley Read more Read more

Reverse charge ― buying in services from outside the UK

Reverse charge ― buying in services from outside the UKThis guidance note covers the reverse charge that applies to services that have been bought in from outside the UK. For an overview of VAT and international services more broadly, see the International services ― overview guidance note. For

15 Dec 2020 14:02 | Produced by Tolley Read more Read more

Married couple’s allowance

Married couple’s allowanceThe married couple’s allowance (MCA) is only available if one of the two spouses or civil partners was born before 6 April 1935. This means that one member of the couple must be at least 89 years old on 5 April 2024 to qualify for an allowance in the 2023/24 tax year.There

14 Jul 2020 12:13 | Produced by Tolley Read more Read more