These notes will help you complete the information in the tax pool calculator.
On this page:
Select the tax year that you wish to work out the tax pool for from the drop down menu.
Enter the number of trusts created by the person who set up the trust - the settlor. (Using this information, the calculator will work out which standard rate band applies. If the settlor created more than one trust, the £1,000 standard rate band is divided equally amongst the trusts - for example, if there are two trusts the standard rate band applied for each is £500. However, if the settlor created five or more trusts, the standard rate band for each trust is £200.)
Enter the amount, if any, of unused tax pool brought forward from last year. Enter 0, if there is no tax pool brought forward. If HMRC normally calculates your tax for you, you can find this figure on the calculation that the Trusts Office sent you after processing your latest return.
In rare cases, you may have a trust where dividend income for one or more of the beneficiaries is not paid or accumulated at the trustees' discretion (i.e. at least one of the beneficiaries has an interest in possession, so this income is non-discretionary).
Where relevant, enter the total value of dividend-type trust income (including tax credit) that is not paid or accumulated at the trustees' discretion. This will be a proportion of the amount shown under total dividend income.
The figure entered here will be deducted from total dividend income when working out the tax pool because non-discretionary income is not relevant for it.
Enter the total amount before tax of all trust income, excluding dividend-type income. This includes rent and savings income. However, please note that you can't use this tool for discretionary trusts with deemed, trade or foreign income.
To check the final tax pool figure, enter the total trust income received before tax for the whole year, excluding dividend-type income.
In rare cases, you may have a trust where income for one or more of the beneficiaries is not paid or accumulated at the trustees' discretion (i.e. at least one of these beneficiaries has an interest in possession, so this income is non-discretionary).
Where relevant, enter the total amount of other trust income before tax that is not paid or accumulated at the trustees' discretion. This will be a proportion of the amount shown under other trust income.
The figure entered here will be deducted from the total basic rate income when working out the tax pool because non-discretionary income is not relevant for it.
Enter the total amount of allowable trust management expenses. This is the figure you show under question 13.19 on the Trusts and Estate Tax Return.
Only trustee expenses that relate directly to trust income qualify as allowable trust management expenses.
Allowable expenses can only be deducted from the income the trustees receive that is taxable at the 'special trust rates' - see below.
| Tax years | Dividend trust rate | Trust rate for all other income |
|---|---|---|
| 2013-14, 2014-15, 2015-16 | 37.5% | 45% |
| 2011-12, 2012-13 | 42.5% | 50% |
Expenses can't be deducted from the income of any part of the trust that is treated differently for tax purposes. For example, in a mixed trust where part of the trust is treated as an interest in possession trust.
Enter the total amount of payments out of income made to beneficiaries (not including the tax credit).
