Confused

We have started to act for a discretionary trust which receives rental income on various properties. No trust accounts have been seen but the trust pays interest on loans made to it by the trustees (who are the sons of the settlor since deceased). The trust's net rental income less these interest payments is distributed to the beneficiaries. Currently the trustees return the trust tax based on the net rental income and distributions with no allowance for the interest paid suggesting that the loans have not been used to finance the rental income (this needs to be discussed) and the trustees disclose the gross interest received on their tax returns.
Could readers advise whether the trustees are correct to pay the interest without deducting tax at 20%? And can the interest paid assuming it was not used to finance the...