The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
In exercise of their dispositive powers, trustees transfer income and capital to beneficiaries. For commentary on the different types of payments, see the Payments to trust beneficiaries guidance note. Most often, particularly in the case of income distributions, the payments will be in cash. Occasionally, the distribution is in the form of non-cash assets.
Trustees need to be aware of the way in which such transfers are done:
in relation to the trust power that they are exercising ― is it a power that has to be exercised by deed or will a resolution suffice?
in relation to the asset in question ― what formalities need to be complied with in relation to the particular asset in question?
what are the tax implications of the transfer and what are the reporting requirements with which they need to comply?
The exercise of the trustees’ dispositive powers must comply with the terms of the trust deed from which the powers derive. So if the trust deed requires a particular power of appointment or advancement to be exercised by deed, then a deed must be used. If not, the exercise of the power will be void.
Equally, if the trustees require an indemnity on the distribution to protect them (should tax or other expenses arise), then the exercise of their dispositive powers should be made by deed.
Where a deed is not required, it will usually be sufficient for a trustees’ resolution to be completed to record the exercise of the trustees’ dispositive powers.
Even once the exercise of the trustees’ powers has been documented, certain additional formalities might need to be adhered to in order to perfect the transfer of trust assets to beneficiaries. The nature of these formalities will depend on the assets concerned. Some common types of asset, and the formalities associated with them, are listed below.
The formalities required will depend on whether the land is registered or unregistered.
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
The majority of state benefits (also called social security benefits) are managed by the Department of Work and Pensions (DWP) via the Jobcentre Plus.Some benefits are dependent on a national insurance contribution record (and different classes of national insurance provide different benefit
Normal due dateSmall companies (including marginal relief companies) are required to pay all of their corporation tax ― nine months and one day ― after the end of the chargeable accounting period.For example, where a chargeable accounting period ends on 31 December 2018, the due and payable date for
The corporate interest restriction (CIR) essentially limits the amount of interest expense a company can deduct from its taxable profits if the interest expense is over £2 million. The actual mechanics of the CIR calculation are highly complex (the legislation is over 150 pages long) and are
Why is this important?Tax-free amountEach individual, whether or not they are resident in the UK, is entitled to an annual exempt amount when calculating the taxable amount of their chargeable gains for the tax year (although see the exceptions below). The annual exempt amount is also known as the
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.