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HMRC internal manual

Trusts, Settlements and Estates Manual

From
HM Revenue & Customs
Updated
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Trust income and gains: beneficiaries: beneficiary receives discretionary income payment from a resident trust

Trustees of a discretionary trust have the power to decide how to apply the trust funds. They may pay from trust income or capital.

Where the trustees make a discretionary payment from income, they usually give the beneficiary a formR185 (Trust Income). They have to do so if the beneficiary requests it.

TSEM3755 explains the position for discretionary income payments to company beneficiaries.

Sections TSEM3756-TSEM3759 explain the position for discretionary income payments to individual beneficiaries.

TSEM3756 explains the position for discretionary income payments from trusts that are not settlor-interested.

TSEM3757 explains the position for discretionary income payments from settlor-interested trusts.

TSEM3759 explains when a discretionary payment is considered to be made.

TSEM3781+ explains the position for capital payments from trusts.