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HMRC internal manual

Trusts, Settlements and Estates Manual

Trust income: trustees receive income from an estate

Personal representatives may pay sums representing income to trustees (who may be themselves, albeit with different responsibilities) of the resultant trust. These payments can be during or at the end of the administration period.

The payments are income in the trustee’s hands. If the trust is within ITA/S479, the income is deemed to be received by the trustees net of tax at the applicable rate ITTOIA/Ss663 and 670. The net income is grossed at that rate and is chargeable at the trust rate or dividend trust rate. Credit is given for the applicable rate tax suffered. TSEM3019 explains which trusts are within ITA/S479.