Interest in possession beneficiaries

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

This note deals with the main principles of income tax that apply to beneficiaries of an interest in possession trust.

An individual will be charged to income tax only where he is entitled to, or receives, income from a taxable source. For a beneficiary of an interest in possession trust, you need to ask: what is the source of the trust income to which he is entitled?

The source of a beneficiary’s income

The source of the income of a beneficiary of an interest in possession trust (constituted under the law of England and Wales) is the trust property itself, and not the right that is enforceable against the trustees to have the trust properly administered.

A beneficiary is specifically entitled to the trust income that has not been used to defray the trustees’ management expenses. In other words he is entitled to the net income arising from the trust property.

In Scots law, the beneficiary of any trust has only a personal right against the trustees to have the trust properly

Continue reading

To read the full Guidance note, register for a free trial of Tolley+™

TAKE A FREE TRIAL

Popular Articles

Employment Tax

Short-term business visitors (STBVs)

Short-term business visitors (STBVs)What is a short-term business visitor?An STBV for UK tax purposes is an individual who performs duties for a non-UK employer and as a part of those duties has been asked to spend a short period working in the UK. There is a common misconception that there is

14 Jul 2020 13:40 | Produced by Tolley in association with Gill Salmons Read more

Exemption ― insurance ― overview

Exemption ― insurance ― overviewThis guidance note provides an overview of the VAT treatment of insurance products and should be read in conjunction with the Insurance ― specific transactions and Exemption ― insurance ― brokers and agents guidance notes.Is insurance exempt from VAT?Supplies of

Corporation Tax

Entity classification

Entity classificationImplications of entity classificationIf a subsidiary is established, it is important to determine how it will be treated for UK tax purposes as this will determine the basis on which it is taxed. A subsidiary may either be transparent (like a partnership, where the individual

14 Jul 2020 11:37 | Produced by Tolley Read more

��Ƶ