Trust income and gains: enquiry into income from a trust - general
Where you have a formal enquiry into either:
- a beneficiary’s or settlor’s SA return, or
- a beneficiary’s or settlor’s repayment claim
you may decide to check the amount of trust income stated by the beneficiary. You should not check the amount where there is no formal enquiry.
In general, you should pursue such an enquiry in the same way as for any non-trust income.
Forms R185 (Trust Income) and R185 (Settlor)
Where the beneficiary has produced a form R185 (Trust Income) showing the income received or entitlement to income, or a settlor has produced form R185(Settlor) showing trustees’ income treated as the settlor’s, deal with it as with any other income recorded on a form or voucher. There is no particular need to check the income. If the form is signed by the trustees and looks bona fide, there is no need to question it. You should not refer cases to Trusts & Estates Technical Edinburgh to check income.
Doubts about forms R185 (Trust Income) or R185 (Settlor)
If you have doubts about the validity of the form or the amount shown, you may want to enquire further.
Form R185 (Trust Income) can be used by the trustee to inform the beneficiary about payments from discretionary trusts and the associated tax credit. The amounts should be shown in the section headed ‘Discretionary income payment from a trust’. You can check the amount of the payment by contacting the Trust & Estates Office that deals with the trustees’ return. See TSEM3860.
Form R185 (Trust Income) can also be used by the trustee to inform the beneficiary about their entitlement to income from a non-discretionary trust. You should check amounts shown on the form only in certain circumstances. See TSEM3865.
Form R185 (Settlor) can be used by the trustees of a settlor-interested trust, to inform a settlor about income to be treated as the settlor’s and the tax paid on that income. The form can be issued for both non-discretionary and discretionary trusts. See TSEM3867.