Tax returns for trustees or charities
In this section:
- Tax returns for trustees
- Completing the Trust and Estate return (trustees)
- Record keeping (trustees)
- Tax returns for charities
Record keeping (trustees)
As a trustee you must keep records of the trust's income and expenses so that you can accurately complete the trust's Self Assessment tax return. You'll need to keep these records for at least one year after the final filing date for the tax return they were used for.
On this page:
- Records you must keep
- Statement of income payments or entitlements for beneficiaries
- How long to keep the records
- If your records are lost or destroyed
- Getting help and advice
Records you must keep
There are many different types of trust and the records you'll need to keep will partly depend on the trust's purpose. For example, the trust may be set up:
- as a charity with particular aims
- to support certain vulnerable individuals
- to protect the value of funds until the intended beneficiaries are old enough to receive them
- to provide income to particular individuals during their lifetime
In all cases you should keep the following documents:
- bank statements for current and deposit accounts
- confirmation of interest paid into bank or building society accounts
- national savings bonds or certificates
- certificates issued by life assurance companies
- dividend vouchers from companies
- stock broker reports
- details of expenses paid by the trustees
- details of all taxes paid by the trust
Take care to keep details of any transactions made using online bank accounts - these may not send out paper statements.
If the trust sells or acquires assets during the year, you'll need:
- completion statements for property transactions
- contract notes relating to stocks or shares
- receipts for sale or purchase expenses
If the trust owns property to let you'll need the following information:
- receipts for expenses connected with the property
- annual bills such as business or water rates
- licence or rent agreements showing the rent payable
If the trust has received additional capital you'll need to record the amount, the date it was received and who made the payment.
Statement of income payments or entitlements for beneficiaries
Trustees may make payments to people who are entitled to receive funds under the terms of the trust - these are known as beneficiaries.
If the trust pays a regular annual amount - or other annual payments - to beneficiaries you'll need to prepare form R185. Give a copy of the form to each beneficiary who receives a payment. The beneficiary needs to use the information on this form to prepare their own tax return.
You'll have to prepare a form R185 (Trust Income) if you:
- make a discretionary payment of income to a beneficiary
- pay out income to a beneficiary with an income entitlement
Give a copy of the form to each beneficiary you've made a payment like this to.
You should keep copies of all the forms R185 'Statement of income from trusts' that you give to beneficiaries.
Read form R185 'Statement of income from trusts (PDF 51K)
How long to keep the records
You should keep the records you've used to prepare the Trust and Estate tax return for at least one year after the deadline for filing that return. For example the Trust and Estate return for the tax year 2007-08 runs to 6 April 2008 and you must submit it by 31 January 2009. You'll have to keep the records you use to complete that return until at least 31 January 2010. If we ask you questions about that tax return during that period you'll need to keep the records until we've finished our enquiries.
If the trust owns property to let, you must keep the letting records for five years after the final date for submitting the Trust and Estate return. For example if the trust let property in the year to 6 April 2008 you must keep the records relating to that property until 31 January 2014.
If your records are lost or destroyed
If the records you need to complete the Trust and Estate return have been lost or destroyed you should try to obtain the missing information in other ways. You can ask a bank to provide interest figures or duplicate bank statements, although they may charge for this.
Don't delay sending in the return while you wait for duplicate records to be produced. Use the information you've managed to get together to complete the return. Where it turns out you can't replace the information you'll need to estimate the missing figures. Just make sure you tell us on the return the status of the figures you include:
- estimated figures - these are figures you want us to accept as final
- provisional figures - you're using these until you can let us have firm figures. You must also let us know when you will supply the right figures.
You can write to us and amend the return with corrected figures within one year of the final date for filing it. But if you do make adjustments at a later date and you underpay, then you may have to pay interest and a penalty.
Getting help and advice
Completing a Trust and Estate return can be difficult. You might like to get professional advice from a tax adviser or solicitor to help complete the return and to help run the trust. Members of the Society of Trust and Estate Practitioners (STEP) are experts who can give you help with any trusts related problem.
Find a trusts expert on the STEP website
Find a solicitor on the Law Society website
Find a tax adviser at the Chartered Institute of Taxation website
