Call us now: 0121-550-8525
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
3 Lyttleton Court, Birmingham Street, Halesowen, Birmingham, B63 3HN

Trusts

Tax rates

 2016/17
Type of trustLife interestDiscretionary
Rate on dividend income 7.5% 38.1%
Rate on other income 20% 45%
CGT rate on residential property 28% 28%
CGT rate on other gains 20% 20%
CGT annual exemption £5,550 £5,550

Notes

  1. Trustees are liable to Income Tax on the trust income, CGT on the trust gains and IHT in some circumstances.
  2. Discretionary trusts pay tax at 7.5% or 20% on income used to pay trust expenses and on another £1,000 of income, before paying at the main rates.
  3. Discretionary trusts for vulnerable beneficiaries (such as disabled people) may reduce their effective tax rates if an election is made.
  4. The CGT annual exemption is divided between trusts established by the same settlor since 6.6.1978, to a minimum of £1,110.
  5. Trustees are liable to pay IHT in a variety of circumstances; appropriate professional advice is essential.
  6. Beneficiaries of life interest trusts ('liferent' trusts in Scotland) are treated as entitled to the income of the trustees, and pay tax on it in the year it arises to the trust, with a credit for tax paid by the trustees.
  7. Beneficiaries of discretionary trusts pay tax on income distributed to them by the trustees, which is treated as paid with a tax credit of 9/11 of the cash received.
AddThis Social Bookmark Button
icaewlogo  Chartered Tax Advisers2bacslogo certifiedquickbookslogo fsblogo sagelogo

Directors:  Paul Cutter FCA | Kate Jones FCCA, ACA | Dave Hazlehurst FCCA, CTA

Registered Office:

3 Lyttleton Court | Birmingham Street | Halesowen | West Midlands | B63 3HN

Site Map | Client Portal Login

A Member firm of the institute of Chartered Accountants in England and Wales

Registered with The Chartered Institute of Taxation as a firm of Chartered Tax Advisers

 Company Number: 07252989

Terms Of Use | Privacy & Cookie Policy