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HMRC internal manual

Trusts, Settlements and Estates Manual

Trust management expenses: introduction: meaning of 'allowable TMEs'

In order to self assess correctly, trustees and beneficiaries need to be certain that they are applying the correct principles on trust management expenses.

In this guidance TMEs are referred to as being ‘allowed’ and as ‘allowable TMEs’.

Those phrases are used to mean trust management expenses that are to be taken into account for tax purposes in order to:

  • tax accumulation/discretionary trustees at rates lower than the special trust rates
  • arrive at the net amount of an IIP beneficiary’s income.

For the meaning of ‘accumulation/discretionary trust’ see TSEM1565.