Commentary

I5.1003 Trustees' chargeability to income tax

IHT, trusts and estates

I5.1003 Trustees' chargeability to income tax

Taxation of trustees—income tax

I5.1003 Trustees' chargeability to income tax

For the latest New Development, seeND.2082.

Trustees' tax position—overview

The trustees of a settlement are together treated as if they are a single person, distinct from the persons who are, have been, or will be the trustees1.

The tax position of the trustees is not affected by the personal circumstances of the individual trustees, so there is no possibility of trustees claiming personal reliefs, such as the personal allowance. Any reliefs due to beneficiaries in respect of the income are claimed by them personally, and any charge to higher rate tax is made on them2 (see Division I5.13).

Where the trustees mandate trust income to a beneficiary, ie the income goes directly to the beneficiary or their agent directly instead of being passed through the trustees, the beneficiary is taxable on that income, not the trustees3.

The income of a settlement is received by the trustees jointly, rather than jointly and severally4. Consequently,

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