Where all or part of a capital payment to the settlor is treated as his income for a tax year, his miscellaneous income for that year includes the amount of the payment grossed up at the trust rate for that year1. If the settlor is entitled to any deductions and reliefs which have not been allowed against other income, he may set them against this deemed income2.
To take account of changing trust rates there is a reduction in the tax charged for a tax year (Y) on a capital sum paid to a settlor to the lowest of3:
- Ìý
(a)ÌýÌýÌýÌý tax at the trust rate for year Y
- Ìý
(b)ÌýÌýÌýÌý the tax charged in respect of the payment, and
- Ìý
(c)ÌýÌýÌýÌý the tax which the trustees have
To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to Tolley+™ Research or register for a free trial
Web page updated on 17 Mar 2025 16:10