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Readers’ forum: Correct tax treatment of gift to charities

08 April 2024
Issue: 4931 / Categories: Forum & Feedback , Employees , Trusts
Employee benefit trust

I am trustee of an employee benefit trust (EBT) that has capital funds arising from the sale of shares that were settled when the EBT was established.

As permitted by the trust deed some discretionary payments have been made from these capital funds to UK registered charities. The total amount was entered in box 11.3 of the 5 April 2023 trust return as this seemed appropriate and my software gave rise to nil tax. However HMRC is showing tax due which reconciles as 20% of the payments. What should the correct tax treatment be? And is box 11.3 correct? Also if 20% tax is correct should this feature in the tax pool calculation?

Query 20 300 – Trustee.

Box 11.3 seems an odd place to have recorded this payment.

I think that something might have gone wrong here. An EBT is a form of discretionary trust and is...

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