Policy paper

Simplifications for trusts and estates

This measure prevents trustees and personal representatives of estates having to report small amounts of income tax to HMRC and simplifies how estate beneficiaries are taxed.

From:
HM Revenue & Customs
Published
15 March 2023

Documents

Estates in administration and trusts

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Details

The package of simplifications:

  • provides that trusts and estates with income up to £500 do not pay tax on that income as it arises
  • removes the default basic rate and dividend ordinary rate of tax that applies to the first £1,000 slice of discretionary trust income
  • provides that beneficiaries of UK estates do not pay tax on income distributed to them that is within the £500 limit for the personal representatives
  • makes technical amendments to ensure for beneficiaries of estates that their tax credits and savings allowance continue to operate correctly

Read the summary of responses to the Income Tax: Low income trusts and estates consultation.

Published 15 March 2023

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