Trust Income

JodieR

It's been years since I've had one of these, but a client has received £250 from a discretionary trust during 2011/12, for which I've got a form R185. In box 1 they've entered £250 AND in the 'Tax credit at the trust rate on box 1 payment' they've also entered £250. It looks a little odd to me, but do I just copy the £250 figure to box 1 of the Trust supplementary pages on his tax return?

EASy

Yes, I believe you're right (however, be aware that my knowledge of trusts is limited!).

The SA107 notes (http://www.hmrc.gov.uk/worksheets/sa107-notes.pdf) state:

Discretionary income payment from a UK resident trust
Box 1 Net amount – after tax taken off
If you are a beneficiary of a discretionary trust, enter in box 1 the amount
received from the trustees after they took off tax. But do not include
payments from a trust that is settlor-interested (see the box 2 note below).
If you received payments from more than one trust, add them together. The
income in box 1 carries a tax credit of 50% so, if you are not taxable at
50%, some tax may be repaid to you or will reduce your overall tax bill –
we will work this out. Payments from non-resident trustees go in box 41 on
the Foreign pages (but see also the note for box 2 below).


This reconciles with your statement - the gross income being £500 (tax credit of 50% = £250, income = £50).

JodieR

Thanks very much! I feel lazy now for not reading the guidence...