Discretionary Trust Tax Pool

Carlo234

Hi All. As a Trustee of my father's Discretionary Will Trust, I'm ok with the basic concept of the Tax Pool, but don't understand one particular aspect.   Using HMRC's Discretionary Trust Tax Pool Calculator, I entered the following:Tax Year 17-18, No of Trusts = 1, Other Trust Income (available for discretionary distribution): £100, Net Payments made to Beneficiaries : £24.45.   The response from the calculator is: “Tax Pool available before Payments to beneficiaries : £20,   Tax Pool surplus/shortfall (after making the distribution of £24.45) = £0"

As trustee, from this I understand that I may only distribute £24.45 of the income to the beneficiaries,  and the amount of tax that I as trustee will pay on the £100 is at most £45.

So from the £100 of income if we subtract the distribution of £24.45, and the maximum (albeit unlikely) tax paid of £45, it leaves £30.55.

What do I do with this remaining £30.55 of income?     Can I distribute it without an accompanying tax credit?

And what's HMRC's reasoning in allowing only £24.45 to be made available for distribution from £100 of income?

Keep_pedalling

You might be better off posting this on the saving tax board, where the tax experts hang out.