The following Trusts and Inheritance Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note describes how the income of a settlor-interested trust is charged on the settlor in accordance with the provisions of the Settlements Code set out in ITTOIA 2005, Part 5, Chapter 5. See the Settlor interested trusts guidance note. The three categories of charge are:
Under all three heads of charge, income tax is charged on a formal trust in the usual way, according to the type of income, at either standard rates or trust rates depending on the type of trust.
See the following guidance notes:
Note however, that tax charged does not always enter a ‘tax pool’. See the different scenarios outlined below.
The trustees must submit a trust and estate tax return SA900 giving full details of the trust income. The fact that the trust / settlor will be subject to one of the charges under the settlements code is indicated on the tax return as described below.
The trustees must provide the settlor with details of the income to be charged and he declares it
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