Preparing a set of accounts ― accounting conventions and double entry bookkeeping

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

Overview

This guidance note details the basics of double entry bookkeeping and the accounting conventions used to prepare a simple set of trust accounts. It is not targeted at accountants, but at tax advisers who have little or no accounting experience.

Accounting conventions

Accounting date and period

Most trust accounts are prepared annually to each 5 April to match the tax year. This is not set in stone however, and in the unlikely event of a different date suiting the circumstances better, this could be used. Income would still need to be calculated on a tax year basis for the accounts.

Accruals

The extent to which the trustees adopt the accruals basis of accounting will depend on the nature of the assets and income. It obviously makes sense to prepare the accounts on the same basis that is used for tax purposes to avoid time consuming tax adjustments.

Rental income is calculated on an accruals basis. See the Property income guidance note. Remember

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Trusts and Inheritance Tax

Outright gifts

Outright giftsAn outright gift is the most straightforward type of gift. It simply involves the outright transfer of property from one person to another with no conditions attached.This type of gift is most suitable for clients who want to pass over modest amounts, or give to responsible and capable

14 Jul 2020 12:22 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more

Corporation Tax

Computation of corporation tax

Computation of corporation taxCompanies pay corporation tax on the taxable total profits (TTP) generated in a chargeable accounting period (CAP).To ascertain whether the entity is within the charge to corporation tax, see the Charge to corporation tax guidance note.For more information on the type

14 Jul 2020 11:16 | Produced by Tolley Read more

Owner-Managed Businesses

Capital allowances on cars

Capital allowances on carsSummary of capital allowances on carsThe current capital allowance rates applicable to cars are as follows:Pool typeDescription of carRateLegislationMain rate poolNew and unused cars with CO2 emissions of 50g/km and below 18%CAA 2001, s 104AASecondhand cars with CO2

14 Jul 2020 11:08 | Produced by Tolley Read more

Autumn Budget 2024

��Ƶ