Robert Oakley

It is a bare trust, so the trust team already told me it was a self assessment issue! Typical that one department says it is the other, but you can't speak to both at the same time and have them tell each other that. You just get left without an answer!

A family member who died in 2020 was the beneficial owner of equity in a partnership that was held in trust (The Trust) by a partner (Partner X). Partner X has been in a legal battle with the partnership which has resulted in a settlement to be paid through Partner X receiving partnership income equal to the settlement amount (Settlement X) for the year 2022/2023 (having previously received £0 for that year). The partnership has amended the partnership tax return to show Partner X has received Settlement X. Partner X, as trustee of The Trust, no needs to account for the trust's share of the settlement (Settlement Y) to the estate of the deceased. Partner X is stating that they must declare the full amount (Settlement X) and pay tax on the full amount to HMRC and that they therefore can't pay Settlement Y to the Trust on a gross basis. Question 1: Is this correct, or could Partner X declare their partnership income to be (Settlement X - Settlement Y) on the self assessment, explaining the difference and giving the UTR of the deceased? Question 2: If the above is not possible (or Partner X refuses to do this) and hence makes a payment to the estate on a Net basis (equal to 60% of Settlement Y, assuming 40% paid as tax) then, as Trustee, are they required to provide proof that the income paid to the estate (from the trust) is "tax paid" and the exact amount of tax paid (i.e. via an R185)? Once the income is received into the estate (either Gross or Net of ICT) then the executor will be required to complete a tax return for 2022/2023 on behalf of the estate and declare it as received. Presumably, if received net of ICT (at 40%) then the estate will be able to claim back the excess tax (as the estate would pay a flat rate of 20%). If received gross then the estate will have to pay 20%. Question 3: Once the taxed income is correctly settled into the estate account (i.e. 80% of Settlement Y, where 20% has been paid in tax by the estate), is this then subject to further income tax when distributed to the beneficiaries? I.e. is this still considered income of the beneficiary, so subject to any marginal rate based on their personal income status?

Thanks. That was my interpretation of the rules, however the HMRC employee who processed the request won't allow it as he says the deadline to amend was Jan 31st 2022. Is there a way to appeal and have someone else consider it?

Hi This is cash interest - hence the question. I had noted the explicit inclusion for non-cash interest, but there is nothing to include or exclude cash interest from loan notes; however there isn't on the notes accompanying the SA100 either - but all suggestions from HMRC Admin confirm that "Taxed UK Income" is the correct option on SA100, so looking for the same confirmation for R40.

My understanding is that a claim for SEIS relief can be made up to five years from 31 January of the year after the tax year in which they made the investment. So for an investment made in June 2019 (i.e. 2019-2020 tax year), the claim can be made up until 31st January 2026. That claim allows for the income tax relief to be claimed in the year of the investment of the proceeding year (i.e. 2019-2020 or 2018-2019). However the deadline for amending such a claim is less clear, and this is what I would like to know. The circumstances are thus: My father made an SEIS investment in June 2019. Unfortunately, he passed away in May 2020 and so I, as executor, completed his 2019-2020 and 2020-2021 tax returns based on the information gathered through the probate period. A few months later I discovered an SEIS form for an investment made in June 2019. I wrote to HMRC to amend the IHT return and claim the income tax relief against 2019-2020 (being the tax year of the investment). They processed the claim and issued a refund, taking tax due in 2019-2020 to zero. I then became aware of a loss on an investment that occurred before he passed, which was eligible to be set against income tax for 2019-2020, and made a further amendment to do so. This was accepted by HMRC - however, there was no refund as the previous claim had reduced the tax paid to zero. The SEIS relief is no longer required against his 2019-2020 return and, had I known the full circumstances at the time of making the initial claim, I would have carried this back to 2018-2019 (where there is tax that can be reclaimed). What are the rules on amending an EIS/SEIS claim under such circumstances?

My son is the beneficiary of mandated income from an income in possession trust. As mandated income, it is received directly by him and is not considered "income from a trust", this has been confirmed by the advisor who set up the trust (who is both a lawyer and chartered tax advisor) and by HMRC's trusts department. Some of his income is interest paid from a UK loan note (i.e. a corporate loan, to a UK company denominated in £ sterling) where WHT was deducted and an R185 issued and we want to declare/reclaim that tax (as under his personal allowance) using form R40 as opposed to registering a minor for self-assessment. Is it correct to declare the loan note interest (and tax paid) using the "Taxed UK Income" section of the R40? This is in line with responses from HMRC on similar queries made in relation to SA100; however, the notes that accompany R40 do not list this type of income (or anything I can justifiably relate to this type of income), which would only leave the option of "other income"?