TSEM5615 - Trusts for particular purposes: compensation under ESC A68 - example using savings income - years to 2009-2010

The trustees must meet the conditions of the concession (TSEM5610).

This is how to calculate relief on savings income.

Income and tax rates Amount Total

Tax pool brought forward

-

Nil

Interest received

£100,000

-

Tax on standard rate band (20%)

£1,000

£200

Tax due at trust rate (40%)

£99,000

£39,600

Income available for distribution

£60,200

-

Total Tax pool

-

£39,800

Amount distributed subject to PAYE

£60,200

-

The compensation payable to trustees is the lesser of

Tax Amount Total
  • tax at trust rate on the total payments which are treated as employment income

£60,200 @ 40% =

£24,080
  • tax which the trustees have available in the ‘tax pool’ above

-

£39,800

The compensation payable is therefore

-

£24,080