Filling in HMRC R40 form

Anthear

Hi - can someone help me fill in this form please?  My sons have Trust income that I have to claim the tax back on and I find the form confusing - anyone able to help, please?  Thanks

Dazed_and_C0nfused

Anthear said:

Hi - can someone help me fill in this form please?  My sons have Trust income that I have to claim the tax back on and I find the form confusing - anyone able to help, please?  Thanks

What bit is confusing?

Anthear

I am looking at "Trust settlement and estate income" Boxes 4.1 to 4.12

Savings income of £2,391.00
Tax paid £1,1075.95
This is purely savings interest, not dividends etc.

To complicate matters I have to half it as there are 2 children so each has to claim their half.

If someone could guide me, I'd really appreciate it.. :-)

Anthear

Dazed_and_C0nfused said:

Anthear said:

Hi - can someone help me fill in this form please?  My sons have Trust income that I have to claim the tax back on and I find the form confusing - anyone able to help, please?  Thanks

What bit is confusing?

'Net amount taxed at Trust rate - after tax has been taken off'  - in my example what would be the figure to use bearing in mind it's 50% of the figure, not 100%

and do I will in box 4.2 and 4.3 or just 4.6 and 4.7 or both with the same figures??

poseidon1

Anthear said:

I am looking at "Trust settlement and estate income" Boxes 4.1 to 4.12

Savings income of £2,391.00
Tax paid £1,1075.95
This is purely savings interest, not dividends etc.

To complicate matters I have to half it as there are 2 children so each has to claim their half.

If someone could guide me, I'd really appreciate it.. :-)

I assume you have received  from the trustees a tax deduction certificate R 185 ( trust income) and that is where the trust income figures came from.

If so did the numbers come from the Discretionary income section of the certificate or non Discretionary income?

It maybe coincidence but 45% of £2391 is £1,075.95 which happens to be the rate of tax charge on discretionary trust income .  Furthermore did your children actually receive a total of £1,315.05? If not, what was the amount?

If you can clarify the above, I should be able to guide you to the correct entries to the correct boxes of  the R 40s.

Anthear

 poseidon1 said:

Anthear said:

I am looking at "Trust settlement and estate income" Boxes 4.1 to 4.12

Savings income of £2,391.00
Tax paid £1,1075.95
This is purely savings interest, not dividends etc.

To complicate matters I have to half it as there are 2 children so each has to claim their half.

If someone could guide me, I'd really appreciate it.. :-)

I assume you have received  from the trustees a tax deduction certificate R 185 ( trust income) and that is where the trust income figures came from.

If so did the numbers come from the Discretionary income section of the certificate or non Discretionary income?

It maybe coincidence but 45% of £2391 is £1,075.95 which happens to be the rate of tax charge on discretionary trust income .  Furthermore did your children actually receive a total of £1,315.05? If not, what was the amount?

If you can clarify the above, I should be able to guide you to the correct entries to the correct boxes of  the R 40s.

I don't see those sections on the R185 form?

The Trust received income of £2,391 in savings income, we then had to pay HMRC £1,075.95.

The Trust is a Relevant Property Trust.

Hope that helps?  Thanks for offering to help :-)

poseidon1

I now see from past posts you administer the trust yourself without professional guidance which is perhaps unfortunate.

As for the R 185 see below where the split between Discretionary and Non Discretionary  trust income is quite clear -

https://assets.publishing.service.gov.uk/media/66ab31c5ab418ab055593141/R185Trust-Income.pdf

You have not answered my question, was trust income of £1,315.05 ( ie £657.52 per child )  actually paid to each child during the 2024/25 tax year, which I assume is the year you are dealing with?

If there were no income payments to the children at all in the year, you have no basis to recover tax paid by the trust in the year in question. You should be aware in the case of relevant property trusts, tax paid by a trust is only recoverable when accompanied by actual income payments to beneficiaries during the same year.

Therefore, to be clear if you now want to claim some or all trust tax incurred in the last tax year, you must now distribute income to the beneficiaries in the current year ( into their personal bank accounts ) and prepare an R40 for 2025/26 to recover the tax in each case.  

So since you have now established your net distributable trust income for 2024/25( ie £1315.05), you can distribute these arrears this year ( 2025/26 as indicated above).

As for the entries on the R40 ( for 2025/26) after you have made the £1,315.05 payments to the children, you will be inserting £657.52 in Box 42 and  £537.97 box 43.


However I have concerns.

From previous posts you have made there are/were in two separate settlement amounts of  approximately £100k and £50k respectively.  Were you running two separate trusts funds ( for tax purposes) or have they been merged ( in some way)  and a single  trust tax return submitted for the joint income received?

I also see these trust/s date back to 2015, and you seemingly prepared R40 tax refund claims in past years. If so, based on what I have stated above, on what basis have you been submitting the claims?

Significantly one of your more recent posts indicate the trust may have been wound up - see link below

https://forums.moneysavingexpert.com/discussion/6613161/buying-property-with-help-from-a-will-trust#latest

I would comment that the administration, accounting and tax compliance for relevant property trusts is probably the most complex of all forms of trusts in the UK  with commensurate scope for mistakes, oversights and faulty administration. the piecemeal way you have been raising queries in the past, has made it difficult ( if not impossible ) to provide you with coherent joined up guidance on this forum.

If the trust/s (?)have indeed  been terminated as intimated in the June 2025 post how did you achieve this given your past aversion to seeking professional advice? Was a deed prepared by a solicitor and executed by you as trustee, if so when did this happen and do you still continue to hold the trust cash  in your control despite the seeming  termination?

Perhaps you could provide an up to date summary of your dealings with the trust funds, up to the point of your June 2025 post, to permit a more targeted holistic response.

Anthear

Thanks for the info, much appreciated. 

Don't have the bandwith to go through all your questions and the answers are irrelevant to you.  I haven't claimed the tax back for a numbers of years as HMRC didn't send me a Statement and I have sorted this with them.  I know I can go back 4 tax years, which is what I am doing now having sorted it all out.

Needless to say I am resourceful enough to have wound up BOTH (YES, there were TWO) Trusts with HMRC's help.

Thanks for your concern, all is above board and compliant.

Anthear

I have this form:  https://assets.publishing.service.gov.uk/media/65e5aeb57bc329e58db8c1b9/R185Estate-Income.pdf

poseidon1

Anthear said:

I have this form:  https://assets.publishing.service.gov.uk/media/65e5aeb57bc329e58db8c1b9/R185Estate-Income.pdf

It's the wrong R185.

You will see first page  clearly states it relates to  deceased estates during estate administration period. It has no relevance to trusts. Did you find it yourself or did HMRC supply?