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We have recently taken a new case comprising a self settled trust and the settlor's personal tax. The trust holds an investment in an offshore unit trust from which it receives untaxed dividends in the region of £25,000 and there is a small amount of UK bank interest. The previous advisers have included the dividend in the foreign pages of the self-assessment trust return and paid 10% tax.
We have recently taken a new case comprising a self settled trust and the settlor's personal tax. The trust holds an investment in an offshore unit trust from which it receives untaxed dividends in the region of £25 000 and there is a small amount of UK bank interest. The previous advisers have included the dividend in the foreign pages of the self-assessment trust return and paid 10% tax.
On the settlor's self-assessment tax return the dividend has been shown as trust income with non-repayable 10% tax credit. As the trust income is the settlor's only income she is getting a repayment of the tax paid against her bank interest but is wasting £4 000 of personal allowances.
It strikes me that without the existence of the trust the foreign dividends would be included in the settlor's personal tax return on the foreign...
