188体育

The settlor of a 鈥榮ettlor-interested鈥� accumulation/discretionary trust gets no relief for TMEs. 鈥業ncome arising under a settlement鈥� in a settlor-interested trust is the gross income without the deduction for trust management expenses.

In computing the settlor鈥檚 liability the same deductions and reliefs are allowed as would be if the deemed income had actually been the settlor鈥檚. But no trust management expenses are allowed over and above the normal deductions for each source of income.

For example, a settlor-interested accumulation/discretionary trust has income of 拢10,000 out of which TMEs of 拢800 are incurred. Including the standard rate band, the trustees will pay at 20% on 拢2,000 (SRB + grossed up TMEs) and 50% on the balance 拢8,000, a total of 拢4,400. A settlor chargeable at 40% on the gross 拢10,000 is liable for 拢4,000 with credit for the trustees鈥� tax, so is due repayment of 拢400. A settlor chargeable at 50% on the gross 拢10,000 is liable for 拢5,000 with credit for the trustees鈥� tax, so is due to pay an additional 拢600.