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HMRC internal manual

Trusts, Settlements and Estates Manual

From
HM Revenue & Customs
Updated
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Trust management expenses: introduction: tax rules

There are two sets of tax rules governing whether trust management expenses are allowable in the two main types of trust:

  • one for accumulation/discretionary trusts - where what is ‘properly chargeable to income’ in general trust law has priority - see TSEM8205+.
  • one for interest in possession trusts - where what is ‘properly chargeable to income’ in the trust deed has priority - see TSEM8305+.

There are rules derived from case law about what is meant by ‘properly chargeable to income’ in general trust law - see TSEM8105+.

There are special rules for bare trusts (see TSEM8405+), settlor-interested trusts (see TSEM8505+) and mixed trusts (see TSEM8605+).