Changes to the 2010-11 Trust & Estate Tax Return

There have been some changes to the 2010-11 SA Trust & Estate Tax Return and supporting guidance notes.

SA900 – main part of the return

  • The special trust rates have been increased to the trust rate of 50 per cent and the dividend trust rate of 42.5 per cent.
  • Step 1 (page 2 – point 3) has been amended to reflect a change in practice. Trustees of settlor interested trusts no longer need to fully complete a return where all the income is mandated to an interest in possession beneficiary.
  • New boxes Q10C and 10.1C – ITA/s496A & 496B have replaced ESC A68. Trustees of UK resident employee benefit settlements now need to use these boxes to claim relief and give the amount of relief claimed.
  • Box 21.10A – the toolkit tickbox has been removed.

SA950 – notes on the SA900

Boxes 8.9 and 8.10 – income from investments or deposits held for the purposes of a s615(3) overseas employment-related pension scheme is not chargeable to tax at the special trust rates. Tick boxes 8.10 and 8.16, report this income in boxes 13.13 to 13.18 and make a note in 'Additional information' box 21.11.

SA904 – Foreign pages

Page TF3 – Foreign Tax Credit Relief (FTCR) for foreign tax paid on chargeable gains. Due to a change in the way that the amount of FTCR, available to set against UK tax on certain chargeable gains, is calculated, you no longer need to complete the middle three columns.

SA904 Notes

Page TFN3 – the notes on Special Withholding Tax (SWT) have been amended and Belgium is now excluded from the list of countries that may deduct SWT.

SA905 – Capital Gains pages

The Budget on 22 June 2010 increased the rate at which Capital Gains Tax is charged on gains accruing on or after 23 June 2010 to 28 per cent for trustees or personal representatives. Gains that qualify for Entrepreneurs’ Relief are taxed at 10 per cent and the lifetime limit for these gains was increased to £5 million from 23 June 2010 (£2 million for gains accruing on or after 6 April 2010 and before 23 June 2010). Form SA905 includes new boxes as follows:

  • Box 5.11 - for all taxable gains accruing between 6 April and 22 June 2010.
  • Box 5.11A - for taxable gains accruing on or after 23 June 2010 which qualify for Entrepreneurs’ Relief. For gains from before 23 June 2010 that qualify for Entrepreneur’s Relief, the amount of relief claimed still needs to go in column G.
  • Box 5.11B - for all other taxable gains accruing on or after 23 June 2010.
  • Boxes below box 5.22 - for amounts of qualifying gains both before and on or after 23 June 2010 where Entrepreneurs’ Relief is claimed.

Late penalties

From April 2011 the penalties for filing your tax return late are changing. If your tax return is one day late you will be charged a penalty of £100, even if you have no tax to pay or the tax is paid on time. There will be further, increased, penalties the more you delay. The penalties for paying tax late are also changing. More information on both of these changes can be found by following the link below.

Tax return deadlines and penalties