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HMRC internal manual

Trusts, Settlements and Estates Manual

Deceased persons: limited interests in residue - discretionary interests in residue - definition

A discretionary interest in residue arises where the deceased did not specifically say in the will who was to get the income or capital of the residue. Instead the deceased left it to the personal representatives to decide at their own discretion.


  1. Where the terms of the will direct that the residue (or part of the residue) is to be held on trust and income/capital paid at the discretion of the trustees. HMRC Administration of Estates Cardiff will hold particulars of the income of the estate and the payments made from it. Any payments from the estate during the administration period are the income of the year of payment.
  2. Where the terms of the will direct that the personal representatives should exercise their discretion to select beneficiaries to receive the residue of the estate, but there is no provision for any continuing trust. Statement of Practice SP4/93 explains the treatment of these estates.


For further advice on this subject, consult HMRC Administration of Estates Cardiff.