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Annual payments etc

For the extent to which relief is available for annual payments etc, see E1.801.

Trust management expenses (TMEs)

The income of a beneficiary of an interest in possession settlement is restricted to the amount of settlement income to which he is entitled. This means that his income does not include settlement income which has been used to incur allowable trustee management expenses (TMEs) as he is never entitled to that income¹ — see TSEM8325.

For the meaning of allowable TMEs, see I5.1005 and I5.1010.

The various types of the beneficiary's income are reduced in the following order²:

1. Ìý

   •ÌýÌýÌýÌý dividends from UK resident companies

2. Ìý

   •ÌýÌýÌýÌý foreign dividends

3. Ìý

   •ÌýÌýÌýÌý savings income

4. Ìý

   •ÌýÌýÌýÌý other income

For an example of the calculation where a reduction is due, see TSEM8365.

TMEs properly chargeable to capital do not reduce the measure