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HMRC internal manual

Trusts, Settlements and Estates Manual

HM Revenue & Customs
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Trust income and gains: Accrued Income Scheme: settlements legislation

ITA/Ss667 and 680

TSEM4000 onwards has details of the Settlements legislation. This counters the tax advantages which settlements could otherwise offer.

Accrued income charge

A charge under the Accrued Income Scheme is treated the same as actual income to which the rules apply. Trustees must make the necessary Accrued Income Scheme calculations. They are chargeable at the trust rate on any accrued income charges.

Accrued income allowance

Accrued income allowances reduce the trust income that the Settlements legislation affects. Trustees must make the necessary calculations.

Residence of trustees

The computations assume that the trustees are resident in the United Kingdom even if, in fact, they are not.