³ÉÈËÓ°Òô

Taxation of trusts ― introduction


Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
tag-icon Autumn Budget 2024

Taxation of trusts ― introduction


Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
tag-icon Autumn Budget 2024
imgtext

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.

Introduction

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.

Beneficiaries’ entitlement

Trust property is legally held by trustees but for the benefit of

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

TAKE A FREE TRIAL
Powered by
  • 01 Nov 2024 08:30

Home/ Tolley Tax Guidance/ Trusts and Inheritance Tax / Advising on trusts — IHT

Popular Articles

Owner-Managed Businesses

Relief for employee share schemes

Relief for employee share schemesRemuneration expenses are generally deductible for corporation tax purposes as they are considered to be incurred wholly and exclusively for the purposes of the trade. However, expenses relating to shares are usually classed as capital and are therefore not

14 Jul 2020 13:21 | Produced by Tolley Read more Read more
Owner-Managed Businesses

Sales, advertising and marketing

Sales, advertising and marketingExpenditure on sales, advertising and marketing activities may include amounts which are disallowable for the purposes of calculating trading profits. This may be because the expenditure is:•capital in nature (see the Capital vs revenue expenditure guidance note)•not

14 Jul 2020 13:28 | Produced by Tolley Read more Read more
Corporation Tax

Entity classification

Entity classificationImplications of entity classificationIf a subsidiary is established, it is important to determine how it will be treated for UK tax purposes as this will determine the basis on which it is taxed. A subsidiary may either be transparent (like a partnership, where the individual

14 Jul 2020 11:37 | Produced by Tolley Read more Read more