SB_Trust

Hi there - I've trawled the manuals but can't find a definitive answer so hope you can help. Situation: An IIP Trust's income is solely from interest on savings. The resulting tax liability for the year is less than £100 for 2022/2023. We've assumed this comes under the current temporary arrangement where a tax return does not need to be submitted and tax does not need to be paid by the Trust (understanding that rules are changing for future years). Please could you confirm that this is the case. If this is the case, should the Trust pay the income to the beneficiary gross and reflect this on the R185? We understand the beneficiary has to include this on their self-assessment and pay the relevant tax, but just want to confirm what the Trust should actually be doing in this case. Many thanks.

Many thanks for the reply. I can't really see on the SA107 where this would be declared. There is no income tax due to be paid by the trust. My nephew's mum left her estate to him in her will (18-25 Trust). Due to the value of the estate there was no IHT due. However, as he is over the age of 18 there is/will be an IHT charge where there is an advancement and/or absolute interest is taken at age 25. There is no income tax payable by the Trust or my nephew. The payment received by my nephew was an advancement of assets for his benefit. The Trust does not pay income tax (just the exit charge), so I'm still not clear how this relates to the SA107. It is not a "discretionary income payment" or a "non-discretionary payment". Do we put in the discretionary box anyway as a net figure and then put notes in the Additional Box? Thanks for your patience!

My nephew is the sole beneficiary of a trust set up following the death of his mother in 2021. This is a Bereaved Young Person's Trust (18-25), so he will receive the trust on his 25th birthday. There was no inheritance tax due on the estate. The Trustees made an advance last year to help him buy a house. The Trust will be paying the exit charge due on the advance (as he is 24 years old). My nephew should have no liability to income tax on this. For his self-assessment, he was going to tick box 6 (page 2) to say he received income from a trust. Is this correct if it is not taxable? Form SA107 states it should not be completed for a bare trust but the income should be recorded in the appropriate SA100 box. But we cannot really find an appropriate box (it is not taxable income). Which boxes should he complete to declare this income (if at all) and ensure he is not taxed on this?