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HMRC internal manual

Trusts, Settlements and Estates Manual

- Non-resident trusts: beneficiary’s chargeability: trust income - interest in possession trust - foreign law - Garland type trust

The beneficiary of a Garland type trust is entitled to his or her share of the net trust income remaining after the trustees have ascertained the balance available after meeting the expenses of administering the trust.

The nature of the income that arose to the trustees is irrelevant, and the amount to which the beneficiary is entitled is regarded as an untaxed source of foreign income. Consequently, in the example at TSEM10425, the entitlement of the interest in possession beneficiary would be to foreign income (untaxed) of £7,000 and not to UK property income.

If the trustees have paid tax on some of the income chargeable, and the beneficiary wishes to obtain credit for the tax, refer to Trusts & Estates Nottingham.