This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Debt Management and Banking Manual

Pre-enforcement: consider the defaulter: trusts and trustees

Responsibilities of trustee

Trustees are responsible for making a return of any income, profit or gains arising to a trust and for paying any income tax or capital gains tax that is due. They will usually arrange for one of them, the principal acting trustee, to deal with HMRC on their behalf. The principal acting trustee is usually the one named in collection records.


If the principal acting trustee fails to meet any of the tax obligations the Department may recover any tax interest penalties and surcharge from any other relevant trustee.

For income and chargeable gains and associated interest, the relevant trustees are persons who are trustees at the time the income or gain arose, or who have become a trustee subsequently. This allows existing tax obligations (in respect of income tax and capital gains) to be passed to new trustees following any changes in bodies of trustees.

But penalties and surcharge (and the interest thereon) can only be recovered from those persons who were trustees at the time the penalty or surcharge arose: these debts cannot be recovered from a person who did not become a trustee until after the surcharge or penalty arose.


You should telephone the principal acting trustee and do all you can to obtain voluntary settlement, including the filing of any outstanding returns, as appropriate. If this is unsuccessful,

  • obtain the names and addresses of all the trustees
  • send a letter to each trustee
  • advise them of the outstanding tax and
  • request payment
  • warn them that in the continued absence of payment recovery proceedings will commence and they will be held personally liable for payment.

Consider telephoning or making personal calls on each individual trustee.

When contacting trustees, whether by telephone, personal call or in writing, you should always make it clear that you are contacting them in their capacity as a trustee of [name of trust].

If payment is not made or the trustees have not given an acceptable reason for non-payment the higher debt manager should consider whether there are alternative means of recovery (DMBM580000), liaising with the technical office as necessary.

Where there is no alternative means of recovery

  • issue a letter along the lines of the form IDMS10(C) to each trustee
  • include a reminder for any outstanding returns
  • B/F 10 days to commence county court proceedings.

You will find details of how to complete

  • the claim form at DMBM665340 and
  • particulars of claim in the DMB Guidance Gateway.

A judgment obtained against a trustee is a personal one and can be enforced in the same way as any personal judgment. In practice it will normally be sufficient to take third party debt order proceedings against the account in which the trust funds are held.