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Introduction

Payments made by a non-UK resident trust to UK resident beneficiaries are governed by a series of ‘tax hierarchy’ rules, which govern the tax treatment of the amounts received by the beneficiary. See the Tax on UK resident beneficiaries of non-resident trusts (overview) guidance note.

The first step is to determine whether the payment is a distribution of income. If it is, the payment is subject to income tax according to the principles set out in the Tax on income distributions from non-resident trusts