Trusts for particular purposes: compensation under ESC A68 - example using dividend income - years to 2009-2010
The trustees must meet the conditions of the concession (TSEM5610).
This is how to calculate relief on dividend income.
|Tax pool brought forward||Nil|
|Tax due on standard rate band (10%)||£100||£100|
|Tax due at (dividend trust rate) (32.5%)||£32,175||£32,175|
|Less non-payable tax credit||£10,000|
|Income available for distribution||£67,725|
|Total tax pool||£22,275|
|Amount distributed subject to PAYE||£67,725|
The compensation payable to trustees is the lesser of
|* tax at trust rate on the total payments which are treated as employment income||£67,725 @ 40% =||£27,090|
|* tax which the trustees have available in the ‘tax pool’ above||£22,275|
|The compensation payable is therefore||£22,275|