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Another frame

19 May 2015 / Steve Kesby
Issue: 4501 / Categories: Comment & Analysis , Inheritance Tax , Trusts

More basic principles of trust tax pools


  • A recap of the basic principles of trust taxation.
  • Trustees’ expenses matching rules and the applicable tax rates.
  • The tax liabilities attaching to discretionary distributions to trust beneficiaries.
  • Tax liabilities when there is an interest in possession.
  • Do not overlook other issues such as settlor-interested trusts and a settlor’s unmarried minor children.

In last week’s Playing pool we considered the income tax liabilities of a discretionary trust – the ABC Trust (below; click image to enlarge) – and the need to maintain a tax pool.

This will ensure that the tax liability which forms a credit against distributions to beneficiaries has been paid.

The previous article looked at the liabilities for 2011/12 2012/13 and 2013/14. This article considers the tax position...

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