TSEM3755 - Trust income and gains: company beneficiary receives discretionary payment from a resident trust

ICTA/Section 687A deals with discretionary payments by trustees to companies. Where the company is chargeable to corporation tax, and is not a charity, a heritage body or a scientific research organisation.

• payments are left out of account in calculating the profits of the company for CT purposes;
• no set-off of income tax credit under ITA/S494 is allowed against the company’s CT Or income tax payable by it;
• no repayment is to be made to the company in respect of the amount treated as paid by the recipient under ITA/S494.