The following Trusts and Inheritance Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
Trustees may be required to run a family business for the benefit of others, or they may decide to invest the trust fund in a business activity. In most cases, such a business will be in the form of a company in which the trustees hold shares so that the trust income arising from it will be in the form of dividends or interest. However, it is possible for trustees to be in receipt of income from an unincorporated business which they own. Some of the situations which might arise are:
The trading activity need not be long term or substantial. It could amount to nothing more than the maintenance of an enterprise whilst arranging a disposal. Nevertheless, trustees must declare and pay tax on all trading income. The £1,000 tax-free trading allowance which is available to individuals is not available to trustees. See the Trading allowance guidance note in the Personal Tax module.
See Example 4.
The same general tax principles of trading apply to all traders, whether they are individuals, trustees or personal representatives. It is a big topic and the rules are dealt with in detail in the Owner-Managed Businesses (OMB) and Personal Tax (PT) modules. This guidance note summarises the general principles and provides links to more detailed material. In addition, it
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