UUÂãÁÄÖ±²¥

Taxation of trusts—introduction

Trusts are subject to the same taxes as individuals—income tax, capital gains tax (CGT) and inheritance tax (IHT)—but the application of those taxes varies according to the status and terms of the trust. The determining factor is most commonly the entitlement of the beneficiaries. Other relevant factors are the date of commencement of the trust, the age of the beneficiaries, and whether it was created during lifetime or on death. Therefore, the first step in working out how a trust is to be taxed is to read the trust deed or instrument to assess what type of trust it is. For a basic introduction as to how trusts are taxed, see Practice Note: Introductory guide to the taxation of trusts.

This subtopic deals with trusts that are resident for UK tax purposes and have no foreign connections (such as a non-UK resident or domiciled settlor). For information on the taxation of trusts whose trustees are non-UK resident, see subtopic: Offshore trusts—taxation.

Reform to the taxation of trusts

The government ran a consultation on the taxation of trusts