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HMRC internal manual

Trusts, Settlements and Estates Manual

From
HM Revenue & Customs
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Non-resident trusts: trustees’ chargeability: Income Tax - standard rate band

The first £1,000 of income or deemed income which would otherwise be chargeable to tax at the special trust rates is instead chargeable at the basic rate or dividend ordinary rate, depending on the nature of the income. This first part of income is known as the ‘standard rate band’. For full details see TSEM3012+.

If the trustees of a non-resident trust receive foreign income on which they are not chargeable to income tax, then the standard rate band is not allocated against such income.

Example

In 2013-14 the non-resident trustees of a trust within ITA/S479 have the following income:

UK property income = £1,200

UK dividend income = £800

Foreign income = £1,000

The amount of foreign income is not chargeable to tax on the trustees. £1,000 of the property income is liable at the basic rate, and the balance £200 plus the UK dividend income is chargeable at the special trust rates (see TSEM3017, order of income).