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HMRC internal manual

Trusts, Settlements and Estates Manual

Non-resident trusts: trustees’ chargeability: Income Tax

The trustees of a non-resident trust are not chargeable to UK income tax on any foreign income arising to the trust.

The trustees of a non-resident trust are chargeable to UK income tax on UK-source income arising to the trust. The amount of any UK income chargeable to income tax will depend on:

  • the nature of the income and
  • the residence status of the beneficiaries of the trust.

The trustees of a non-resident trust may not be chargeable to income tax on trust income. In certain circumstances the settlor or beneficiary of the trust may be chargeable instead. See TSEM10300+, and TSEM10400+.

ITTOIA 2005 sets out the territorial scope of the charge to tax on income. The effect on non-resident trustees is as follows:

  • profits of a trade carried on by non-resident trustees are chargeable to tax if they arise from a trade carried on wholly in the United Kingdom - S6(2)
  • profits of a UK property business carried on by non-resident trustees are chargeable to tax - S269(1)
  • profits of an overseas property business carried on by non-resident trustees are not chargeable to tax - S269(2)
  • savings and investment income arising to non-resident trustees is chargeable to tax only if it is from a source in the UK - S368(2)
  • miscellaneous income arising to non-resident trustees is chargeable to tax only if it is from a source in the UK - S577(2)