This guidance note gives an overview of the ‘Managing your client’s trust’ sub-topic. Why should trust accounts be kept and in what format? How do you prepare the accounts? It also considers payments of income and capital to beneficiaries in cash or in specie and the considerations to be made by trustees when making such a distribution. The support for beneficiaries in receipt of state benefits and the rules in respect of accumulating income are considered.
The Payments to trust beneficiaries guidance note considers the trustees’ powers to make payments and whether the payment made is income or capital. It is designed to give outline and background for accountants and tax advisers who deal with clients establishing trusts. It is not targeted at lawyers. It considers the issues that trustees should take into account before making a payment in respect of their powers and in respect of the different types of trust. It also considers whether the payment is of capital or income and the effect of the
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Foreign tax reliefIncome and gains may be taxable in more than one country. The UK has three ways of ensuring that the individual does not bear a double burden:1)treaty tax relief may reduce or eliminate the double tax2)if there is no treaty, the individual can claim ‘unilateral’ relief by deducting
Payment of the remittance basis chargeRemittance basis chargeThe remittance basis charge is an annual charge payable by ‘long-term’ UK residents for the privilege of claiming the remittance basis.Taxpayers who wish to utilise the remittance basis (but do not qualify for it automatically) must pay
Temporary differencesCalculation of temporary differencesThe temporary difference arising in respect of an asset or liability is calculated by comparing the carrying value of that asset or liability with its tax base.IAS 12 uses the concept of taxable or deductible temporary differences. Whether a