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HMRC internal manual

Trusts, Settlements and Estates Manual

Non-resident trusts: beneficiary’s chargeability: trust income- discretionary trust - Extra Statutory Concession B18

The Baker or Garland categories of cases do not apply here at all.

If the trustees of a non-resident trust make an income distribution to a beneficiary, the beneficiary may be chargeable to tax on the payment:

Trust is an employee benefit trust

Payments made to a beneficiary are generally emoluments of the beneficiary, and are taxable as ‘Employment Income’. If the trustees have paid tax on the trust income out of which the payment was made, then the beneficiary may claim credit for tax paid by the trustees under ESC B18 (TSEM10440).

Trust is not an employee benefit trust

See TSEM3790.