Trust management expenses: accumulation/discretionary trusts: order of set-off
ITA/S486(1) provides the order in which expenses are to be set against income. Allowable TMEs are set against income chargeable to the special rates of tax in ITA/S479 in this order:
- against income that carries a non-payable ordinary dividend rate tax credit or notional tax credit of 10%, for example dividends or stock dividends from UK companies, then
- any excess against other dividend income not within 1, then
- any excess against savings income, finally
- any excess against other income.
See example in TSEM8255.