Do I need to declare my income for tax return on a trust?

Hi All,

My father passed away three years ago and left an amount of money for me in a trust, which is managed by two trustees - my uncle and my mother. I receive an amount every month paid directly into my bank account. As far as I am aware the trust is a fixed amount of money made up from the sale of my dad's estate, etc. Besides it possibly accruing interest I am quite sure it is not earning any additional money through other avenues.

I am the main beneficiary, however if any money remains in the trust when I die this passes to my half brother and sister.

My mother contacted me recently stating that I need to provide details about my gross income (e.g. P60) so that a tax return can be filed for the trust. She and I are not on good terms and I would really rather she did not have access to this information if possible. If I pass it directly to my uncle I am almost certain he would share the details with her.

Am I actually legally required to provide information about my income for the tax return to be completed? This has been sprung on me at the last minute as I am led to believe that the return must be completed by 31st Jan.

Thanks in advance for any help and advice.

Comments

  • xylophone
    xylophone Posts: 44,139
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    See https://www.gov.uk/trusts-taxes/beneficiaries-paying-and-reclaiming-tax-on-trusts

    https://professionalparaplanner.co.uk/development/taxation-of-trust-income/

    Unless the Trustees are in some way responsible for your tax affairs, I can't see why they would need details of your income.
  • Having had a look at the Gov guides as far as I can understand it appears to be a discretionary trust. Unfortunately the trustees (my uncle & mother) have not been particularly forthcoming with information about the nature of the trust due to our fraught relationship. I have seen my father's will but no documentation regarding the trust itself (assuming there would be something separate to the will).
  • xylophone
    xylophone Posts: 44,139
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    I have seen my father's will but no documentation regarding the trust itself

    What exactly does your father's will say regarding the Trust?
  • Tom99
    Tom99 Posts: 5,371
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    Having had a look at the Gov guides as far as I can understand it appears to be a discretionary trust. Unfortunately the trustees (my uncle & mother) have not been particularly forthcoming with information about the nature of the trust due to our fraught relationship. I have seen my father's will but no documentation regarding the trust itself (assuming there would be something separate to the will).
    In which case the trust is a tax entity in it's own right and should be paying income tax an CGT at the appropriate rate which is quite high:
    - Income up to £1,000pa - Dividend 7.5% Other Income 20%
    - Income over £1,000pa - Dividend 38.1% Other Income 45%
    The trust has no income tax free allowance but does have a £6,000 CGT allowance. CGT is paid at the higher rate of 20% and 28%.
    If trust income is paid to you then the trust should provide you with a tax credit voucher stating the tax already paid and if the rate you would pay is lower you can then claim a refund from HMRC.
    As Xylophone says the tax the trust pays has nothing to do with your tax status.
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