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Trusts
Trusts are liable to income tax on income
and CGT on gains for each tax year. The trustees
are responsible for filing self assessment tax returns
by the normal date (31 January 2009 for 2007/08)
and paying the tax on the normal dates (payments
on account of income tax on 31 January and 31 July
2008, and the balance of income tax and the whole
of the CGT on 31 January 2009).
The tax rates applicable to trusts are: |
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| Rate
on general income (profit, rent) |
22% |
40% |
| Rate
on savings income (interest) |
20% |
40% |
| Rate
on dividend income |
10% |
32.5% |
| Rate
on capital gains |
40% |
40% |
| CGT
annual exemption |
£4,600 |
£4,600 |
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Discretionary trusts for vulnerable
beneficiaries (such as disabled people) can pay
tax at the lower rates if an election is made. Discretionary
trusts pay tax at the lower rates on income up to
£1,000.
The CGT annual exemption is divided between trusts
established by the same settlor since 1978, to a
minimum of £920.
Trusts are also liable to pay inheritance tax in
a variety of circumstances, and trustees should
make sure that they have appropriate professional
advice to enable them to fulfil all their legal
and fiscal responsibilities. |
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