Completing the Trust and Estate Tax Return

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How to avoid common mistakes on the trust return

How to avoid common mistakes on the trust return

If you’re a trustee of a trust that has received income or made chargeable capital gains you must complete a Trust and Estate Tax Return after the end of the tax year. This guide gives some tips to help you complete the return correctly and avoid making common mistakes.

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Tips for completing the Trust and Estate Tax Return
Do you need to complete the whole return?
If you’re completing a paper return
Other useful links

Tips for completing the Trust and Estate Tax Return

The following tips provide a step-by-step guide through some of the key sticking points on the Trust and Estate Tax Return – form SA900. They are useful whether you are doing a paper or online return.

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Do you need to complete the whole return?

You don’t need to complete the Trust and Estate Tax Return in full if any of the statements at Step 1 on page 2 of the return applies to you.

If a statement does apply, show a tick in the appropriate box. Unless you’re the trustee of a charitable trust, you can then skip through to questions 19, 20 and 21, which cover contact details and other practical information. You must then complete the declaration at question 22.

Question 23

Note that question 23, which appears between questions 7 and 8, is only relevant for personal representatives. If you’re a trustee you can ignore this question as you don’t need to complete the pensions pages.

Question 8

You must complete this in full by answering Yes or No to each question. If not, we may need to send the return back to you to complete.

Note that there has been a recent change to the form. Boxes 8.17 and 8.18, which refer to whether or not a vulnerable beneficiary election has been made, have been added. If you were used to the old return, make sure you complete the correct boxes.

Question 9

If you have an interest in possession trust and some of the income has been taxed at source, you need to tick Yes but you don’t need to complete boxes 9.1 to 9.40 for this income. Please note gross income still needs to be entered at question 9.

However, you will need to complete questions 9.1 to 9.40 if the tax credits from the interest in possession trust income are needed for calculations later in the return – for example, to work out if 80 per cent of the income has tax deducted at source for future payments on account.

Box 9.6

Interest distributions can be received untaxed or with 20 per cent tax deducted – therefore make sure you enter the correct figure and that the corresponding figures on this row are correct.

Boxes 9.15 to 9.23

Only exceptionally are dividends received without a 10 per cent tax credit. Remember to include the 10 per cent tax credit/notional tax in boxes 9.16, 9.19 and 9.22 and to include this amount in totals at boxes 9.17, 9.20 and 9.23.

Question 9A

You must include the amount of standard rate band unless:

there is no income on the return or supplementary pages (ignoring capital gains)
none of the income is chargeable at the special trust rates (32.5 per cent for dividends or 40 per cent for all other income)
you have an interest in possession trust with no entries at 9.29 to 9.40 or 3.22 of the Land and Property supplementary pages

The full amount of standard rate band available is £1,000. If the settlor has set up two or more trusts, this must be divided equally between them – up to a minimum of £200 per trust.

You can read more about the standard rate band in our guide below.

Tax on different kinds of trust income

Box 12.2

If you’re completing the Trust and Estate Tax Return for a new trust and the details of all assets settled have already been shown on form 41G(Trust), then you do not need to complete question 12.

Question 13

For all boxes in question 13, show income as gross and expenses as net. There is a new box at 13A for settlor-interested trusts where part of the income is not settlor-interested.

Box 14.15

Show net payments made to beneficiaries (that is the actual amount paid out) and include any tax pool brought forward from last year at box 14.15. If we sent you a tax calculation you will find this on the summary page.

Tax pools and help with tax pool calculations

Box 18

Only tick Yes if you want a repayment to be made. If you want any credit to be set against a future liability you must leave this box blank. Please remember that the trustee must sign this box in order to give authority for the repayment to be made to anyone else.

Box 20

Tick Yes if there are any changes to trustees’ details, even if you have amended the address on the front of the return. Indicate who is to be the principal acting trustee.

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If you’re completing a paper return

Avoid common mistakes

You can avoid making common mistakes by doing the following:

write clearly using blue or black ink and only in the spaces provided
don't include notes on the return like 'per accounts' or 'information to follow'
when you are asked for amounts only use numbers (for example, use the figure 9, not the word ‘nine’)
do not include pence – round down income and gains, round up tax credits and tax deductions
make sure you sign and date the return
check that you've completed and included any supplementary pages needed
read through form SA950 – guidance notes for completing the Trust and Estate Tax Return

Find the Trust and Estate Tax Return, guidance notes and supplementary pages

Use the return with the correct barcode

Your Trust and Estate Tax Return has a bar code that matches your ten-digit unique taxpayer reference (UTR). You must ensure that you use the correct return.

Do not use someone else’s return, as your return will be logged to the original UTR. If you wish to file a paper return and cannot find the one that has been issued to you, please download one from our website.

Supplementary pages

Questions 1 to 7 on the tax return refer to supplementary pages. If you’re using any supplementary pages, remember to tick these boxes and those at question 22 as they let HMRC know if anything has become detached or has not been included with your tax return.