Settlor-interested trusts ― calculations and compliance

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

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:

•
on income arising under a settlement during the life of the settlor, from property in which the settlor has retained an interest
•
on settlement income paid to relevant (ie unmarried minor) children of the settlor, during the life of the settlor
•
on capital paid to the settlor by the trustees of a settlement (to the extent that it can be matched with undistributed income)

General principles

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:

•
Interest in possession trusts ― income tax
•
Discretionary trusts ― income

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL

Popular Articles

Employment Tax

Company cars

Company carsIntroductionCompany cars are one of the most common taxable benefits. The rules for calculating the benefit are complex, and the reporting requirements are more onerous than most benefits. Company cars are covered by very specific legislation. Detailed guidance on each of the following

14 Jul 2020 11:15 | Produced by Tolley Read more

Corporation Tax

Carried-forward losses restriction

Carried-forward losses restrictionOverview of the carried-forward loss restrictionAn important restriction in the use of losses carried forward was introduced by Finance (No 2) Act 2017. Subject to a de minimis of £5m (known as the deductions allowance), most carried-forward losses are restricted to

14 Jul 2020 11:09 | Produced by Tolley Read more

Class 1 v Class 1A

Class 1 v Class 1AClass 1 and Class 1AClass 1 and Class 1A are the categories of NIC that can be charged on expenses reimbursed and benefits provided to employees. These classes are mutually exclusive. A benefit cannot be subject to both Class 1 and Class 1A NIC. Three requirements must be met

��Ӱ��