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HMRC internal manual

Trusts, Settlements and Estates Manual

Trust income and gains: the charge on trustees - standard rate band - order of income

The standard rate band applies to the lowest slice of income and the order in which it is applied against income follows the normal income tax rules in ICTA88/S1A. This provides that dividend income is treated as the highest slice of income, followed by all other income such as income from a trade or from property. Therefore the standard rate band is set:

  • firstly against non-dividend income that is chargeable at the basic rate,
  • then against dividend income chargeable at the dividend ordinary rate.