TSEM3022 – Trust income and gains: the charge on trustees – the tax pool – amounts entering

Tax that trustees pay enters the ‘tax pool’ as follows:

• tax on income and deemed income charged at the trust rate, apart from tax on certain chargeable event gains
• tax on certain chargeable event gains that have tax treated as paid at the savings rate for years where this rate applies) at a rate equal to the difference between the trust rate and the savings rate
• tax on income and deemed income charged at the dividend trust rate, at a rate equal to the difference between the dividend trust rate and the dividend ordinary rate.
• tax on income and deemed income charged at the basic rate or at the savings rate (for years where this rate applies) as a result of the standard rate band

(in all the above, references to income do not include income the tax on which is reduced in accordance with the vulnerable beneficiaries rules)

• tax on income and deemed income determined in accordance with the vulnerable beneficiaries rules.

The relevant legislation is at ITA/S498.