Trust management expenses: ‘properly chargeable to income’: apportionment and tax: recording and evidence: expense not separately recorded: time records kept
Trustees should refer to the invoice for the global costs and any time records maintained by the person charging the costs. The time records should clearly show time spent exclusively on income. The cost can be apportioned partly to income. The trustees should have explained to the accountants etc. what constitutes activities exclusively for the income beneficiaries (e.g. by giving them a current copy of Help sheet HS392). The accountant etc. keeps records on the basis of this.
Invoice states ‘Accountancy fees £x’. The accountant has kept records of time spent on the trust’s affairs, and these are analysed as to a) exclusively income and b) other. The records show that y% of time has been spent exclusively on income benefit matters. The accountants inform the trustees. The trustees charge y% of the cost to income.
Invoice states ‘Trustees’ fees £x’. The trustees have kept records of time spent on dealing exclusively with matters that benefit the income beneficiaries, e.g. each item shown in trustees’ minutes contains a note of time taken. The records show that the trustees spent y% of their time dealing exclusively with income matters. The trustees charge y% to income.