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HMRC internal manual

Trusts, Settlements and Estates Manual

Trust management expenses: IIP trusts: IIP beneficiaries: case law

There is case law in Murray v CIR (11 TC 133), MacFarlane v CIR (14 TC 540), and CIR v Dewar (16 TC 93-94). A beneficiary with an absolute interest in income (for example a life tenant) is entitled to the amount arising to the trustees that is available after any management and administration expenses etc. of the trustees have been provided for. Consequently the beneficiary is taxable on the net amount - CIR v Hamilton of Dalzell (Lord) (10 TC 406).