This guidance note explains the different interests that a beneficiary can have in a trust and gives an overview of the inheritance tax, income tax and capital gains tax treatment of trusts. In each case it links out to more detailed guidance notes which cover the different tax treatments in detail.
The taxation of trusts is based on the personal tax regime. Trusts are subject to the same taxes as individuals: income tax, capital gains tax and inheritance tax. However, 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 examine the trust document to ascertain these details.
Trust property is legally held by trustees but for the benefit of
Research and development expenditure credit (RDEC)This guidance note provides information on how research and development expenditure credits (RDEC) are calculated and utilised. The Qualifying expenditure for R&D tax relief guidance note provides information on what expenditure qualifies for
Simple assessmentsFrom 2016/17 onwards, HMRC has the power to make a 鈥榮imple assessment鈥� of the taxpayer鈥檚 income tax and / or capital gains tax liability outside of the self assessment system. As HMRC already receives significant amounts of information on the income received and tax paid by
Double tax reliefWhen income arises in a foreign country to a UK resident company and that income is taxable in that foreign country, the UK may give the company relief for the foreign tax by crediting the foreign tax against the UK tax charged on that income. This might include withholding tax on