Trusts and trustee tax responsibilities
The extent of a trustee’s responsibilities depends on the type of trust it is. For example, in a ‘discretionary trust’, a trustee is responsible for deciding when to make payments to beneficiaries as well as declaring and accounting for tax on trust investments. In a ‘bare trust’, the trustee may have few duties to perform. Providing they are old enough, the beneficiaries will decide how to use trust capital and income and are responsible for declaring and paying any tax due.
The person who set up the trust – the settlor – may have given instructions that trustees carry out various functions. These may be contained within the ‘trust deed’, which outlines the terms of the trust. Trustees are legally bound to act on these instructions.
- Trustee tax reporting obligations
Trustees are responsible for making sure that any income or capital gains is declared and tax is paid. If you’re a trustee and haven’t already received a Trust and Estate Tax Return you must notify HMRC when: a new trust that will receive income or make chargeable capital gains has been set up a trust that hasn’t been receiving [...]
- Non-resident trusts
Non-resident trusts are usually ones where: none of the trustees is resident in the UK for tax purposes only some of the trustees are resident in the UK and the settlor of the trust wasn’t resident, ordinarily resident or domiciled in the UK when the trust was set up or funds added. The tax rules for non-resident trusts [...]