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HMRC internal manual

Employment Status Manual

From
HM Revenue & Customs
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Particular occupations: trustees under a will, settlement etc.

Where, under a specific direction in a deed or will creating a trust or settlement, an annual sum is payable out of the income arising from the trust fund to a trustee as ’remuneration’ for services as trustee, the payment should be treated as an annual payment within the meaning of Section 348 ICTA1988. It should not be regarded as chargeable under the employment income rules.

An annual payment as ‘remuneration’ to a trustee by virtue of an Order of the Court or a Deed of Appointment made subsequent to the deed or will creating the trust or settlement should normally also be treated as within Section 348 (see Hearn v Morgan 26TC478 and Pritchard v Lathom-Browne 26TC478). The ’remuneration’ should be regarded as earned income (AP44).

Where, however, a trustee is a professional person (for example, a practising solicitor) and is entitled under the deed or will to be paid all usual professional or other charges for any business done for the trust, any payment received by him in this capacity should be included in the computation of his liability to tax on trade profits (Jones v Wright 13TC221).