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HMRC internal manual

Trusts, Settlements and Estates Manual

Settlements legislation: about certification under ITTOIA/S646(6A)

For years 2010-11 onwards the increase in the trust rate to 50% will result in many settlors receiving repayments which they are required to pass on to the trustees. If requested a certificate should be issued to advise the settlor how much to pay the trustees.

Where a certificate is requested, calculate the amount of the repayment (see TSEM4550). Prepare a certificate on plain notepaper. The wording is at TSEM4553. An Officer of Revenue and Customs must sign and date the certificate.

A certificate and three copies should be issued as follows.

  • The original goes to the settlor who requested the certificate, or their agent to send to the trustees, or their agent, to keep in support of the trust accounts.
  • A copy goes to the settlor or their agent for the settlor’s records.
  • A copy is kept in the DR of the office issuing the certificate to the settlor, with notes kept on the relevant computer system.
  • A copy is sent to the Trust and Estates Office with responsibility for the trust (UTR of the trust is on the R185(Settlor)) for them to retain in their trust file.

These certificates can be prepared and issued by either

  • the settlor’s office or
  • the Trust & Estate office.

The settlor’s tax liability may change after a certificate has been issued - for example a relief or allowance may be claimed which is set against settlement income thus generating a further repayment. In such circumstances a new certificate may be issued but it should be marked to show that it supersedes the earlier one.