The Thalidomide Trust is a charitable trust. Charitable trusts
are not taxed on their income, but payments to beneficiaries still
fall within the normal rules.
Up to 4 August 2004, income payments from the Thalidomide
Trust to beneficiaries were discretionary. As such they were
subject to the same rules that govern payments from all
discretionary trusts (TSEM3755-3756).
Income payments from the Trust counted towards the
beneficiaries’ taxable income and reduced their level of
entitlement to tax credits.
The beneficiaries were taxed on the payments at their
marginal rate of tax with credit given at 34% (40% from 6 April
2004) under ICTA/S687(1) and (2).
