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HMRC internal manual

Trusts, Settlements and Estates Manual

Trust income and gains: the charge on trustees - the charge on trustees - trust income mandated to a beneficiary

Trustees of interest in possession trusts (IIPs) (TSEM1564) exclude from the Trust and Estate Tax Returns income mandated to beneficiaries. The beneficiaries include this on their personal returns. This practice has been extended to trustees of settlor interested trusts (TSEM4000+) where the settlor (or the settlor’s spouse or civil partner) is also an IIP beneficiary and the trust income is mandated to them.