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HMRC internal manual

Trusts, Settlements and Estates Manual

Trust income and gains: the charge on trustees: the tax pool - general

When trustees of a discretionary trust pay income to beneficiaries they have to ensure that they have paid enough tax to cover the tax credit at the trust rate (see TSEM3756). Trustees therefore need to keep a record of tax payments, known as the ‘tax pool’.

The ‘tax pool’ in an accumulation/discretionary trust at any point is

  • the total of tax that has entered the tax pool - see TSEM3021


  • the total amounts that have left the tax pool to cover credits on discretionary income payments to beneficiaries - see TSEM3022

If the total of credits to beneficiaries in a tax year exceeds the amount of the tax pool available for the tax year, the trustees have to pay the excess tax - see TSEM3023.