Trustees may be required to run a family business for the benefit of others, or they may decide to invest the trust fund in a business activity. In most cases, such a business will be in the form of a company in which the trustees hold shares so that the trust income arising from it will be in the form of dividends or interest. However, it is possible for trustees to be in receipt of income from an unincorporated business which they own. Some of the situations which might arise are:
a deceased testator leaves his professional practice on trust to provide an income for his spouse. See Example 1
a trust is created for the farming activities and other commercial interests of a complex landed estate. See Example 2
trustees with residential property holdings may decide that the best way of maximising the fund for beneficiaries is to engage in property development. See Example 3
The trading activity need not be long term or substantial. It
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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
Taxation of loan relationshipsThe vast majority of companies will have loan relationships and so will need to consider how they are taxed under the loan relationship rules. There are also specific provisions dealing with relevant non-lending relationships and other deemed loan relationships.
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